The Board of Directors (the Board) has pleasure in presenting the
 Thirty Fourth Annual Report of the Company; the Audited Statement of
 Accounts and the Auditors Report for the year ended March 31, 2009.
 
 Financial Results
 
 The financial results of the Company for the year ended March 31, 2009,
 are summarised below:
 
                                              (Rs. million)
 
 Particulars                          Year ended     Year ended
 
                                         31.03.09      31.03.08
 
 Gross income                            8,329.08     12,703.98
 
 Profit before depreciation
 and tax                                 3,625.80      6,825.02
 
 Depreciation                              354.33        281.66
 
 Profit before tax                       3,271.47      6,543.36
 
 Provision for tax                       1,026.19      2,207.97
 
 Profit after tax                        2,245.28      4,335.39
 
 Balance brought forward                 9,175.50      5,077.03
 
 Balance available for
 appropriation                          11,420.78      9,412.42
 
 Appropriations
 
 Preference dividend                       202.50        202.50
 
 Redemption premium on
 preference shares                         409.01
 
 Dividend distribution tax                  99.26         34.42
 
 Transfer to general reserve               230.00
 
 Balance carried to Balance
 Sheet                                  10,480.01      9,175.50
 
 Earnings Per Share (in Rs.)                68.20        182.15
 
 Dividend
 
 The Board recommends payment of dividend of 3% on Preference Shares of
 Rs. 10/- each amounting to Rs. 202,500,000/- for the year ended March
 31, 2009. In view of the long term growth plans of the Company, it was
 decided not to recommend any dividend on equity shares for the year
 ended March 31, 2009.
 
 Transfer to Reserves
 
 The Board recommends transfer of Rs. 230,000,000/- out of its current
 years profits to the general reserve.
 
 Corporate Update, Operations and Future Outlook
 
 The Indian economy decelerated to 6.7% growth in FY09 from about 9%
 during the previous three years, dampened down by the global credit
 crisis. This sparked off a countercyclical policy response in terms of
 aggressive monetary easing. We expect the Indian economy to bottom out
 in FY10, on the back of softer lending rates, further economic triggers
 funded by PSU divestment and return of capital flows on the back of a
 stabilizing rupee. A severe drought could however, likely restrain
 Indias GDP growth in FY10.
 
 Afterthree record years, FY08-09 marked a lull in the Indian equity
 capital markets. The Indian stock market performed in line with global
 and regional markets and yielded a negative return of 37.9% during FY09
 as against a positive return of 19.7% in FY08. The secondary markets
 witnessed heavy selling from institutional and retail investors through
 the year with Sensex falling below the 8,000 level in October 2008.
 During the year, Flls sold -US billion of Indian equities - the
 biggest sell-off by foreign investors in the history of Indian markets.
 Domestic insurance companies were the only class of institutional
 investors who were net buyers during the last financial year. The
 primary markets saw a significant drop in equity raising during the
 year at -US.7 billion compared to a record US.6 billion in the
 previous year.
 
 In September 2008, Bank of America Corporation (BAC) announced that it
 has agreed to acquire Merrill Lynch & Co., Inc. (ML&Co) in a US
 billion all-stock transaction that created a company unrivalled in its
 breadth of financial services and global reach.  The global merger
 between BAC and ML&Co was completed on January 1, 2009 and has created
 a partnership that is exceptional in its size, scope and expertise. The
 integration process between the two organizations in India is
 progressing well.
 
 During the year, Mr. Hemendra Kothari, founder Chairman of DSP Merrill
 Lynch Limited (DSPML) announced his retirement from the firm to focus
 on areas of personal interest and Merrill Lynch purchased his remaining
 10% shareholding. Mr. Kothari leaves behind a legacy of a strong
 franchise, one with a leading performance track record in India.
 
 During the year, the Company completed the sale of its 40% stake in DSP
 Merrill Lynch Fund Managers Ltd. (DSPMLFM) to BlackRock Advisors
 Singapore Pte. Ltd.
 
 In line with market conditions, the Companys revenues and profits
 were lower than last year, however the Company continued to
 maintain its leadership position in the markets.
 
 Corporate Social Responsibility (CSR)
 
 Philanthropy is an important commitment for the Company. During the
 year, the Company maintained focus on its philanthropic initiatives
 across Wildlife / Environment, Youth / Education and Health. Partnering
 with NGOs such as ADAPT, Akanksha Foundation, Cancer Patients Aid
 Association, Chitdline, HetpAge, the Company carried out several
 programs across the spectrum of volunteering, monetary contribution and
 giving in kind. The programs range from mentoring underserved children
 from Akanksha, to blood donation camps for children suffering from
 Thalassaemia, participation in the Mumbai Marathon, supporting various
 NGOs, matching donation programs, aswellascontribution in kind to
 various charities.
 
 The Company will continue working towards making a positive
 contribution to the community.
 
 Subsidiaries
 
 DSP Merrill Lynch Capital Limited (DSPMLC)
 
 The audited statement of accounts of DSPMLC for the year ended March
 31, 2009, together with the report of Directors and of the Auditors, as
 required under Section 212 of the Companies Act, 1956, are attached.
 
 DSP Merrill Lynch Securities Trading Limited (DSPMLST)
 
 The audited statement of accounts of DSPM LST for the year ended March
 31, 2009, together with the report of Directors and of the Auditors, as
 required under Section 212 of the Companies Act, 1956, are attached.
 
 Consequent to the acquisition of ML&Co by BAC, the Reserve Bank of
 India (RBI) directed that the Primary Dealer business in India should
 be carried out by only one of the entities of the combined group. Hence
 one of the group companies DSPMLST has surrendered its Primary
 Dealership authorisation to the RBI and accordingly ceased to be a
 Primary Dealer effective June 22, 2009. DSPMLST continues to be a
 Non-Banking Financial Company (NBFC) with RBI.
 
 DSP Merrill Lynch Trust Services Limited (DSPMLTS)
 
 The audited statement of accounts of DSPMLTS for the year ended March
 31, 2009, together with the report of Directors and of the Auditors, as
 required under Section 212 of the Companies Act, 1956, are attached.
 
 Directors
 
 During the year, the following directors were appointed on the Board of
 the Company:
 
 Ms. Jennifer Taylor and Mr. Antonios Biniaris were appointed as
 Additional Directors effective March 18, 2009. In terms of the
 provisions of the Companies Act, 1956, your approval is sought for
 appointing them as Directors on the Board of the Company as detailed in
 the notice convening the Annual General Meeting.
 
 Since the last Annual General Meeting, the following directors resigned
 from the Board:
 
 Mr. Hemendra Kothari retired as Chairman of the Company with effect
 from April 1, 2009.
 
 Mr. Kevan Watts and Mr. Nozer Shroff, who were whole time directors of
 the Company, stepped down from the Board on January 31, 2009.
 
 Mr. Daniel Cochran resigned from the Board on April 17, 2009.
 
 Mr. Jason Brand resigned from the Board on December 31, 2008.  As a
 result Mr. Paul Masi who was appointed as his Alternate Director ceased
 to hold office as his Alternate effective December 31, 2008.
 
 Mr. Raymundo Yu resigned from the Board on January 9, 2009. As a result
 Mr. Rahul Malhotra who was appointed as his Alternate Director ceased
 to hold office as his Alternate effective January 9, 2009.
 
 Mr. Sheldon Trainor, who was appointed as Alternate Director to Mr.
 Damian Chunilal has resigned from the Board effective November 11,2008.
 
 Mr. Damian Chunilal vacated his office with effect from June 29, 2009.
 
 The Board places on record its appreciation for the contributions made
 by them during their tenure on the Board.
 
 Audit Committee:
 
 The Audit Committee comprises the following directors:
 
 Mr. Shitin Desai 
 Ms. Jennifer Taylor 
 Mr. Antonios Biniaris
 
 The above Committee functions as an Audit Committee for the purpose of
 the Companies Act, 1956.
 
 Directors Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
 Directors of the Company state that:
 
 (i) While preparing the accounts for the year, applicable accounting
 standards have been followed consistently and proper explanation
 relating to material departures, if any, have been made;
 
 (ii) Accounting policies have been applied consistently, and reasonable
 and prudent judgments and estimates have been made so as to give a true
 and fair view of Companys state of affairs at the end of the financial
 year and of the profit of the Company for that period;
 
 (iii) Properand sufficient care has been taken forthe maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 (iv) The annual accounts have been prepared on a going concern basis.
 
 Auditors
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, retire as
 Statutory Auditors at the ensuing Annual General Meeting and are
 eligible for reappointment. However the Company has received intimation
 from M/s. Deloitte Haskins & Sells that they do not wish to be
 re-appointed as Statutory Auditors of the Company. Hence the company
 proposes to appoint M/s. Price Waterhouse, Chartered Accountants, as
 Statutory Auditors of the Company at the ensuing Annual General Meeting
 and has received a consent letter from them in conformity with the
 provisions of Section 224(1-B) of the Companies Act, 1956. The Audit
 Committee has recommended their appointment. The Board recommends
 appointment of M/s.  Price Waterhouse, as the Statutory Auditors and
 requests you to authorise the Board to fix their remuneration.
 
 Particulars of Employees
 
 The particulars in accordance with Section 217(2A) of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules,
 1975, as amended, form a part of this report and are attached
 separately, information in accordance with the Companies (Disclosure of
 Particulars in the Report of the Board of Directors) Rules, 1988.
 
 The Company has not been associated with any manufacturing activities.
 Hence, there is no report pertaining to conservation of energy or
 technology absorption. The details of earnings and expenditure in
 foreign currency are given in Note No. 23(c) and 23(d) & (e) of the
 accounts, respectively.
 
 Acknowledgement
 
 The Board wishes to thank all the regulators for their ongoing
 guidance. The Board extends its heartfelt appreciation to Mr. Hemendra
 Kothari for his invaluable leadership over the years.  The Board
 expresses its appreciation for the support extended by the
 shareholders of the Company and also takes this opportunity to thank
 the employees for their contribution.
 
                     For and on behalf of the Board of Directors
                                                    Shitin Desai
                                         Executive Vice Chairman
 
 Place: Mumbai
 Dated: 17th August, 2009