The Directors are pleased to present the 24th Annual report of CRISIL
 Limited, along with the audited accounts for the year ended December
 31, 2010.
 
 PERFORMANCE
 
 A summary of the Companys financial performance in 2010 is given below:
 
                                                    (Rupees Lakh)
 
                                        Year ended        Year ended
                                 December 31, 2010    December 31, 2009
 
 Total income for the year was         60,233.44         46,445.36
 
 Profit before depreciation 
 and taxes was                         26,918.21         20,422.09
 
 Deducting depreciation of              2,020.85          1,387.93
 
 Profit before tax was                  24,897.36         19,034.16
 
 Deducting taxes of                     5,321.90          4,000.44
 
 Profit after tax was                   19,575.46         15,033.72
 
 The proposed appropriations are:
 
 Dividend                              14,417.96          7,225.00
 
 Corporate Dividend Tax                 2,387.67          1,227.89
 
 General Reserve                        1,957.54          1,503.37
 
 Balance carried forward is            23,553.37         22,741.09
 
 DIVIDEND
 
 The Directors recommend, for approval of the members at the Annual
 General Meeting to be held on April 15, 2011, payment of final dividend
 of Rs. 25 per share for the year under review. During the year, the
 Company paid first, second and third interim dividends of Rs. 25 per
 share each. The Company also paid a special dividend of Rs. 100 per
 share. The total dividend for the year works out to Rs. 200 per share
 as against rs.100 per share in 2009.
 
 BUYBACK OF EQUITY SHARES
 
 The Board of Directors, at its meeting held on September 9, 2010,
 approved the buyback of equity shares of the Company for a total
 consideration not exceeding Rs. 80 crore and at a price not exceeding
 Rs. 6500 per equity share of Rs.10 each from the open market through
 the stock exchanges. The Company received shareholders approval
 through postal ballot for the buyback on October 18, 2010 and issued a
 public announcement on October 20, 2010.
 
 The buyback commenced on November 3, 2010 and closed on November 10,
 2010. The Company bought back 128,156 equity shares at an average price
 of Rs. 6199.87 per equity share.
 
 The paid-up equity share capital of the Company (pre and post buyback
 of shares) is as follows:- share capital of the company (Pre and Post
 Buyback)
 
 Sr no.  Particulars                No.of shares   Share capital 
                                                    (rupees)
 
 1. Paid up Equity Share Capital 
    (Pre Buyback)                    72,25,000     7,22,50,000
 
 2. Total Equity Shares bought back   1,28,156       12,81,560
 
 3. Paid up Equity Share Capital 
    (Post Buyback)                   70,96,844     7,09,68,440
 
 REVIEW OF OPERATIONS
 
 a. RATINGS
 
 Highlights
 
 - Over 5500 bank loan ratings (BLR) outstanding, the largest number of
 BLR in India; 2434 new ratings assigned during the year
 
 - crossed milestone of 17,500 small and medium enterprises (SME)
 ratings; 7800 new SME ratings assigned in 2010
 
 - Launched CRISIL Real Estate Star (CREST) Rating, a first-of-its-kind
 service for retail investors in the real estate sector
 
 - Expanded operations at Global Analytical Centre (GAC) to support
 Standard & Poors (S&P)
 
 Business environment
 
 The business environment remained steady for Ratings for the better
 part of 2010, except for the last quarter of the year, when liquidity
 constraints led to a sharp increase in interest rates and impacted
 fresh debt issuances. Indias corporate bond market was active during
 the year, with interest rates at the short and long-term ends remaining
 attractive, and the investment climate turning positive. Issuances of
 commercial paper (CP) gathered momentum, with volumes growing by 50 per
 cent over the previous year. There were also bond issuances from
 entities rated A and BBB by CRISIL, a positive trend for indias
 corporate bond market. Bank loan ratings maintained steady growth. the
 number of SME ratings continued to grow rapidly, backed by increasing
 acceptance by banks.
 
 S&Ps demand for support from GAC continued to grow steadily in line
 with S&Ps focus on deeper analysis, and quicker response to market,
 and on improving data accuracy and enhancing support for its products.
 
 The bond markets are expected to remain subdued in the initial period
 of 2011 as liquidity conditions are expected to remain tight with the
 monetary policy focusing on controlling inflationary pressures.
 However, the long term prospects remain strong with substantial demand
 for funds from infrastructure companies and the need for the financial
 sector to tap the bond market for funding the Indian economys growth.
 CP issuances are also expected to increase, driven by the introduction
 of base rates in the banking sector. the BLR market is likely to remain
 steady in 2011, as banks become increasingly compliant with Basel II
 requirements. The demand for SME ratings is expected to remain robust
 in 2011.
 
 GACs operations are expected to maintain their growth momentum in
 2011, fuelled by recovery in the global credit markets and S&Ps
 continuing focus on extending its leadership in the global financial
 information, data and, analytics businesses.
 
 Operations
 
 CRISIL ratings maintained its market leadership in 2010, backed by a
 steady performance in BLRs and strong growth in SME ratings. During the
 year, CRISIL assigned 2434 new BLRs and 7800 SME ratings. To manage the
 increasing volume of business, processes and work flows were upgraded
 to maintain quality of output and timeliness of delivery. Analytical
 teams received additional training to keep them abreast of global and
 local developments. These measures have ensured that CRISIL is current
 on all its ratings and rating publications, despite significantly
 increased volumes.
 
 In 2010, CRISIL Ratings assigned Indias first-ever ratings for
 securitisation of toll-road receivables, and multiple-asset
 securitisation of microfinance institution (MFI) loans. These set the
 trend for a number of similar transactions.
 
 CRISIL Real Estate Star (CREST) Ratings, a first-of-its-kind service
 for Indias fast-growing real estate sector, provides a city-specific
 all-round assessment of real estate projects, and helps buyers
 benchmark and identify quality projects within a city. The product has
 received an encouraging response from all stakeholders–developers,
 buyers, investors, and bankers. CRISIL has already evaluated 29
 projects across 10 cities.
 
 CRISIL continued to conduct regular outreach programmes for the benefit
 of investors and market participants. Around 150 seminars, including
 the CRISIL Leadership series for BLR customers, and MSME CEO
 conferences for SMEs, were conducted across the country; these seminars
 helped extend crisiLs reach to more than 8500 companies and bankers
 across the country.
 
 CRISIL also published Indias first-ever comprehensive report on the
 performance of all outstanding structured finance transactions. CRISIL
 Ratings commentaries, including those on the introduction of base
 rate, floating savings rate, capital provision for real estate assets,
 capital infusion by Government of India (Gol) in public sector banks,
 impact of 3G license on telecom companies, and Gois fertiliser policy
 changes, received extensive media coverage.
 
 GAC continued to be an active partner in S&Ps initiatives to adapt to
 the evolving regulatory environment, and penetrated the commercial
 fixed income data and analytics segment. With the revival of the global
 economy, the demand for S&Ps ratings and McGraw-Hill Financials
 data/information services is expected to grow. This will translate into
 increasing requirements for GAC support. GAC is well positioned to
 strengthen its relationship with S&P, and maintain its growth
 trajectory.
 
 B. RESEARCH
 
 B.1. GLOBAL RESEARCH & ANALYTICS
 
 B.1.a. IREVNA
 
 Highlights
 
 - Expanded geographic presence with sales offce in Sydney and research
 centre in China
 
 - Ranked # 1 firm in the world in financial services research, risk
 management and actuarial services, corporate fnance support and
 financial services analytics by the Black Book of Outsourcing - a
 Datamonitor company.
 
 Business environment
 
 The slowdown in the global financial markets in 2008-09 had a positive
 impact on the global analytics and research industry, with customers
 looking increasingly to research providers such as Irevna as a
 strategic means of restructuring their businesses. Demand for Irevnas
 services remained buoyant through 2010, driving robust growth in
 business volumes. Investments in new services such as actuarial and
 risk analytics, and in expanding Irevnas global footprint, have
 yielded positive results.
 
 The demand for knowledge services is expected to remain buoyant, as
 global players look for ways to grow their revenues and become more
 efficient. The Irevna-Pipal Research combine is the leader in this
 market, and has a proven track record of helping clients increase their
 revenues, provide deeper and faster analysis to the market, and improve
 returns on investment (ROI). This will help us beneft from the growing
 demand for our services.
 
 Operations
 
 Irevna continued to lead the global knowledge services industry, adding
 22 new clients in 2010, significantly growing all client accounts, and
 firmly establishing actuarial and risk analytics as growth verticals.
 Irevnas international research centres in Buenos Aires (Argentina) and
 Wroclaw (Poland), together with those in Mumbai and Chennai, facilitate
 round-the-clock servicing of client requirements, bridging talent gaps,
 and providing multi-lingual capabilities. Irevnas new research centre
 in China will help enhance these capabilities, particularly in the
 Mandarin language, and extend the reach of its services further.
 
 B.2. INDIA RESEARCH
 
 Highlights
 
 - Released 65 CRISIL Independent Equity Research (IER) reports during
 2010, providing investors with high-quality research on listed Indian
 companies. Received a mandate from the National Stock Exchange to
 provide company reports on entities listed on the exchange
 
 - Received a prestigious mandate from Employees Provident Fund
 Organisation (EPFO) to assist in selecting, and monitoring the
 performance of fund managers
 
 - Launched the new, enhanced website, www.crisilresearch.com, to
 deliver near-real-time industry research to customers
 
 Business Environment
 
 The favourable domestic economic environment and increasing investments
 in 2010 revived demand for CRISIL Researchs offerings. A number of
 companies that were raising funds approached CRISIL Research for
 valuation reports and sector studies to aid in their decision-making.
 Opportunities in the wealth management space also increased because of
 a shift in the industrys business model, from products to value-based
 advice.
 
 Operations
 
 CRISIL Research continued to build on its powerful value proposition of
 providing macro and micro integrated research. It also intensifed
 efforts to reach out to the corporate sector with industry studies and
 customised research offerings. The revamped website
 www.crisilresearch.com gives customers near-real-time access to
 research. the website enables clients to track and forecast the
 performance of 50 industries, using CRISIL Research data and analysis,
 and the clients own assumptions about key variables.
 
 Market participants, including listed companies, drove strong demand
 for CRISILs Independent Equity Research (IER): On a cumulative basis
 81 reports have been published, including 20 sponsored by the National
 Stock Exchange Investor Protection Fund Trust (NSE IPFT). CRISIL also
 received a mandate from NSE IPFT to provide company reports on the
 entities listed on the exchange. Investors can access the equity
 research and company reports sponsored by NSE IPFT at www.crisil.com
 and www.nse- india.com.
 
 CRISIL FundServices has been re-appointed by EPFO, to assist in
 selecting fund managers and monitoring their performance, for a
 three-year period. CRISIL FundServices also worked closely with the
 Indian mutual fund industry to help it transition to revised valuation
 norms for money market instruments.
 
 C. ADVISORY
 
 CRISIL carries out its infrastructure advisory and risk solutions
 businesses through its subsidiary, CRISIL Risk and infrastructure
 solutions Limited (CRIS).
 
 C.1. CRISIL INFRASTRUCTURE ADVISORY BUSINESS 
 
 Highlights
 
 - Assisted the Ministry of Rural Development, Government of India
 (GoI), in a unique and innovative public-private-partnership project to
 provide urban services in rural areas (PURA); the pilot project
 promises to be the first of many such endeavours
 
 - Helped the Ministry of Non-Conventional Energy, GoI, design the
 framework for exchange of renewable energy purchase obligations, and a
 platform for trading in renewable energy certificates
 
 - Received a renewed mandate from the World Bank to conduct training
 programmes in enhancing the regulatory reform capabilities of member
 regulators of the East Asia Pacific Infrastructure regulators forum
 (EAPIRF)
 
 Business environment
 
 Activity levels in the urban and energy sector-the two key areas for
 CRISs advisory business showed contrasting trends in 2010. The energy
 sector saw significant investments in conventional energy projects by
 the public and private sectors, strong policy and regulatory
 initiatives in the renewable energy sector, and downstream activity to
 deploy natural gas available in the country. The urban sector, however,
 witnessed a slowdown in investments and activity in 2010, particularly
 in the second half, as the first phase of Jawaharlal Nehru National
 Urban Renewal Mission (JNNURM) reached maturity.
 
 The outlook for 2011 suggests continued activity in the energy sector,
 and a revival of deferred projects in the urban sector. State
 governments are also expected to undertake infrastructure development
 projects.
 
 Operations
 
 Revenues in the infrastructure advisory business were constrained by
 the slowdown in urban sector projects investments, although an
 investment revival in the energy sector mitigated the impact of the
 slowdown. To broad-base revenue, CRISs advisory business has set up a
 team to exclusively pursue opportunities in the transport and logistics
 sector. the business will also focus on growing its presence in the
 mineral and social infrastructure sectors.
 
 The strong domain expertise that CRIS brings to the table is likely to
 help it beneft from the renewed developer and private equity interest
 in conventional energy projects. CRISs growing credentials in
 renewable energy, transportation and logistics, and oil, gas, and
 minerals will add to our range of operations in the private sector.
 
 CRISIL international operations remain strongly focused on Africa,
 backed by a slew of assignments in Namibia, Mozambique and South
 Africa. The World Banks renewal of the mandate to CRIS to assist the
 East Asia Pacific Infrastructure Regulators Forum (EAPIRF) to enhance
 the regulatory reform capabilities of member regulators, is a strong
 testimonial to criss credentials as an enabler of regulatory
 efficiency.
 
 CRIS made significant progress in 2010 in streamlining operations with
 respect to staffing, and improving the quality of its deliverables and
 collection processes. CRIS expects to carry this momentum forward into
 2011, and benefit from improvements in knowledge management to better
 harness our capabilities and experience.
 
 C.2. CRISIL RISK SOLUTIONS (CRS)
 
 Highlights
 
 - Won key accounts in the public and private banking sector - portfolio
 of customers now includes 9 of indias top 10 banks
 
 - entered the global arena, winning two prestigious mandates including
 a reputed multilateral development institution in South East Asia
 
 - Developed a loan origination system to enable automation of a banks
 credit appraisal process as an important module in its internal rating
 platform
 
 Business environment
 
 Over the past five years, most banks have invested considerable
 resources in their processes, especially those pertaining to credit
 risk, as part of their initiative to comply with Basel II. Most banks
 and financial institutions have now developed strong practices with
 regard to credit risk, and the Standardised Approaches of Basel II, and
 have, therefore, begun to shift their focus to strengthening other
 processes, such as those that relate to Advanced Approaches.
 
 CRS believes that banks and financial institutions will, over the medium
 term, continue to invest in systems and processes, and move from a
 compliance-based approach in risk management to a best- practices-based
 approach. CRSs services are, therefore, likely to be in increasing
 demand.
 
 Operations
 
 CRS remained focused on both consulting and software solutions, and
 concluded multiple assignments in both.
 
 CRS added vital enhancements to all its products such as Risk
 Assessment Model (RAM), Capital Assessment Model (CAM), CRISIL
 Operational Risk Evaluator (CORE) and Credit Capital (CC). CRS aims to
 expand its product coverage and increase its product usability. Various
 enhancements have helped strengthen the product positioning as a
 comprehensive end-to-end solution encompassing both risk measurement as
 well as associated process management.
 
 Intensified business development initiatives in countries such as
 Mauritius, Sri Lanka and Bangladesh, have also begun to yield results.
 The business successfully renewed its ISO9001:2008 certification.
 
 D. COLLABORATION WITH S&P
 
 The various business verticals of CRISIL and S&P collaborated
 extensively.
 
 Key initiatives included a joint seminar by CRISIL Ratings and S&P on
 The New Normal: The changing face of Financial Markets. More than 100
 invitees, including media and investors, attended the event.
 
 CRISIL and S&P jointly released the Standard & Poors Indices Vs Active
 (SPIVA) report for Indias mutual funds industry. this report, a
 bi-annual publication, compares the performance of indices and active
 funds.
 
 CRISIL Infrastructure Advisory collaborated with S&P to co-sponsor the
 World Bank-Singapore- infrastructure finance summit. this summit was
 organised by the world Bank, the singapore Ministry of finance and the
 Monetary Authority of Singapore in association with the financial times
 and the world Bank-AseAn infrastructure finance network.
 
 Additionally, CRISIL Risk Solutions worked closely with S&P to market
 its products and services in several geographies, including the Middle
 East and Asia Pacifc.
 
 As part of the collaborative efforts, C-CER published 11
 reports/articles on Asia-Pacifc economies for S&P.
 
 E.  CRISIL CENTRE FOR ECONOMIC RESEARCH (C-CER)
 
 C–CER continued to focus on research on macro economics in India and
 the Asia Pacific, consistently building crisiLs franchise in the
 Indian media and positioning the company as the foremost analytics-
 based voice on the economy in the region.
 
 C-CER published two special reports during the year–Skilling India:
 The Billion People Challenge, and India: Raising the Growth Bar. It
 also introduced two new products—CRISIL EcoMonitor and South Asia
 economic outlook. c-cer continues to work with the Egyptian institute
 of Directors (EloD), and Hawakmah, the Institute for Corporate
 Governance (a subsidiary of the Dubai International Financial Centre)
 for creation of an Environmental, Social & Governance (ESG) Index in
 their respective regions.
 
 F.  HUMAN RESOURCES
 
 crisiLs Human resources team continued to focus on attracting,
 retaining, and growing talent. in 2010, 1083 employees were hired, up
 from 579 hired in 2009. the total headcount in CRISIL increased to 2805
 as on December 31, 2010 from 2164 a year previously.
 
 Highlights of CRISILs talent Attraction Initiatives
 
 - strengthened the senior management team
 
 - Maintained strong presence on campuses—42 business schools were
 visited during the year and job offers were extended to 186 students
 
 - Increased the number of seats on offer at the CRISIL Certified
 Analyst Programme (CCAP), which entered its fourth year, with 47
 interns from the programme joining during the year.
 
 - Inducted all 17 interns from the frst batch of the Irevna Certified
 Analyst Programme (ICAP)
 
 Retaining talent
 
 CRISIL followed a structured approach towards people development, by
 understanding the functional and behavioural competencies required for
 each role, and then devising a comprehensive training plan to address
 gaps in skill sets.
 
 More than 1100 training sessions were conducted organisation-wide,
 during the year, aggregating 77,752 man-hours of training. These
 trainings ranged from technical subjects to functional and behavioural
 skill-building programmes.  to increase employee engagement, the
 rewards and recognition programme, crisiL AWARDS Celebrating Winning
 Performances was revamped, expanding the scope of the awards,
 increasing the transparency of the process, and providing greater
 visibility to award winners.
 
 CRISILs brand-building and thought leadership initiative, the CRISIL
 Young Thought Leader (CYTL) competition, received 153 responses from
 students of 62 business colleges and graduate schools.
 
 During the year, 93 employees received remuneration of Rs. 2.4 million
 or more per annum. In accordance with the provisions of Section 217(2A)
 of the Companies Act, 1956 and the rules framed thereunder, the names
 and other particulars of employees are set out in the annexure to the
 Directors Report. In terms of the provisions of Section 219(1) (b)
 (iv) of the Companies Act, 1956, the Directors Report is being sent to
 the shareholders without this annexure. Shareholders interested in
 obtaining a copy of the annexure may write to the Company Secretary at
 CRISILs registered offce.
 
 G. SUBSIDIARIES
 
 CRISIL has been granted an exemption by the Ministry of Corporate
 Affairs from attaching individual annual reports of its subsidiary
 companies to its annual report. A statement containing brief financial
 details of these companies is included in the annual report. the annual
 accounts of the subsidiary companies and the related information will
 be made available to shareholders who seek such information.
 
 H. ACQUISITION OF PIPAL RESEARCH
 
 CRISIL signed agreements on September 22, 2010 for the acquisition of
 the assets of Pipal Research corporation (PRC) including 100% of the
 share capital of Pipal research Analytics and information Services
 India Private Limited. After completion of all conditions precedent,
 the transaction was completed with effect from December 3, 2010.
 
 I.  JOINT VENTURE - INDIA INDEX SERVICES AND PRODUCTS LIMITED
 
 India Index Services and Products Limited (IISL), CRISILs 49:51 joint
 venture with National Stock Exchange of India Limited (NSE), provides a
 variety of indices and index-related services and products to the
 capital markets. IISL has a licensing and marketing agreement with S&P,
 the worlds leading provider of investible equity indices.
 
 II CRISIL issued licenses to various clients such as Insurance
 Companies, Asset Management Companies, etc. within India for
 facilitating the launch of Index Funds, Exchange Traded Funds and
 issuance of debentures that carry returns linked to the S&P CNX Nifty
 Index. IISL also concluded licensing agreements for issuance of
 structured products linked to the S&P CNX Nifty Index outside India.
 
 J.  DIRECtORS
 
 In accordance with the articles of association of the Company and the
 provisions of the Companies Act, 1957, Mr. BV Bhargava and Dr. Nachiket
 Mor retire by rotation and being eligible, offer themselves for
 reappointment.
 
 K. AUDITORS
 
 The Statutory Auditors, M/s. SR Batliboi & Co, Chartered Accountants,
 hold offce up to the ensuing Annual General Meeting and the Board
 recommends their reappointment.
 
 L.  MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual report.
 
 M. CORPORATE GOVERNANCE
 
 The Company is committed to maintain the highest standards of corporate
 governance and adhere to the corporate governance requirements set out
 by SEBI.
 
 The report on corporate governance as stipulated under Clause 49 of the
 Listing Agreement forms part of the Annual report.
 
 The certificate from the auditors of the Company confirming compliance
 with the conditions of corporate governance as stipulated under Clause
 49, is attached to this report.
 
 N. OTHERS
 
 N.1 PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
 AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE
 
 The particulars regarding foreign exchange earnings and expenditure
 appear at Item No. 8 and 9 in the notes to the Accounts. since the
 company does not own any manufacturing facility, the other particulars
 relating to conservation of energy and technology absorption stipulated
 in the Companies (Disclosure of Particulars in the report of the Board
 of Directors) rules, 1988 are not applicable.
 
 N.2. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER THE
 PROVISIONS CONTAINED IN SECTION 217(2AA) OF THE COMPANIES ACt, 1956
 
 Your Directors hereby confirm that:
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed.
 
 (ii) The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the Profit or loss
 of the company for that period.
 
 (iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 (iv) The Directors have prepared the annual accounts on a going concern
 basis.
 
 Employees Stock Option Scheme
 
 The shareholders of the Company by postal ballot on February 4, 2011
 approved the Employees Stock option scheme for employees and whole-time
 Directors of CRISIL and its subsidiaries.Acknowledgements
 
 The Board of Directors wishes to thank the employees of CRISIL for
 their exemplary dedication and the excellence they have displayed in
 conducting the operations of CRISIL. The Board also wishes to place on
 record its sincere appreciation of the faith reposed in the
 professional integrity of CRISIL by customers and investors who have
 patronised its services. The Board acknowledges the splendid support
 provided by market intermediaries. The affliation with Standard and
 Poors has been a source of great strength. the Board of Directors also
 wishes to place on record its gratitude for the faith reposed in CRISIL
 by the Securities and Exchange Board of India, the Reserve Bank of
 India, the Government of India, and the state governments. The role
 played by the media in highlighting the good work done by CRISIL is
 deeply appreciated.
 
                            On behalf of the Board of Directors,
 
                                                   Deven Sharma
 Mumbai, February 14, 2011                             Chairman