got a formula that works fine just dont understand bits of it formula


=IF(INDEX(Sheet1!$CD:$CD,COLUMN(B31))="ok","Y","N" )

I understand which column and sheets it refers to the only bit that i dont get is the B31 as it dose not matter if i change it to B333 it still refers to to the cell that is second down in column CD ie. cell CD2 it dose not affect the workbook but i was just interested in the way the formula works