Your directors have pleasure in presenting the forty sixth annual report together with the audited accounts of the company for the year ended 31 March, 2024.

FINANCIAL RESULTS

SHARE CAPITAL

During the year, pursuant to the approval of shareholders by way of postal ballot on 7 September, 2023, the company had allotted 1,69,49,152 equity shares of face value of Rs. 2 each to 106 Qualified Institutions Buyers (QIBs) at Rs. 1,180 per equity share aggregating to Rs. 2,000 crores and 2,00,000 compulsory convertible debentures (CCD) at a face value of Rs. 1,00,000 per CCD aggregating to Rs. 2,000 crores to 23 QIBs on 5 October, 2023.

Hence, there was an increase in paid up capital by Rs. 3.58 crores, consequent to allotment of shares to QIBs and upon exercise of stock options by employees under the company's employee stock option schemes.

Total paid up equity share capital of the company as at 31 March, 2024 was Rs. 168.06 crores.

OPERATIONS

India's automobile industry bounced back in FY24. Automobile industry registered sales of 24.8 million units driven by the passenger vehicle segment's best-ever sales of 4.21 million units in FY 24. On-book loan portfolio of Affordable Housing Finance Companies continued to report strong YoY growth of 26% in FY 24 and exceeded Rs. 1,04,000 crores as of 31 December, 2023. Large NBFCs share of consumer loans has been increasing steadily on unsecured, small-ticket and small-tenor loans in the consumer and small business loan segments.

Your company achieved its highest ever disbursals, collections, and profitability in FY 24. The disbursements for FY 24 grew by 33% to

Rs. 88,725 crores. Disbursements in Vehicle Finance (VF) business grew by 21% in FY 24 to Rs. 48,347 crores. Disbursements in Loan against property (LAP) business grew by 46% to Rs. 13,554 crores in FY 24. Disbursements in Home Loans (HL) stood at Rs. 6,362 crores in FY 24, which is a growth of 66% Year on Year (YoY). Disbursements in Small and Medium Enterprises (SME) stood at Rs. 8,106 crores in FY 24 which is a growth of 27% YoY. Disbursements in Consumer and Small Enterprise Loans (CSEL) stood at Rs. 11,281 crores in FY 24 which is a growth of 64% YoY. Disbursements in Secured Business & Personal Loans (SBPL) stood at Rs. 1,074 crores in FY 24 which is a growth of 138% YoY. The business AUM of the company stood at Rs. 1,45,572 crores which is a growth of 37% YOY.

The profit before tax of the company for FY 24 was Rs. 4,582 crores as against Rs. 3,600 crores for FY 23, which is a growth of 27% YoY. The company continues to hold a strong liquidity position with _ 7,898.62 crores as cash balance as at end of Mar'2024 (including Rs. 2,979.24 crores invested in Gsec / TBill & Rs. 599.25 crores invested in Strips shown under investments), with a total liquidity position of _ 8,314.94 crores (including undrawn sanctioned lines).

The Asset Liability Management (ALM) was comfortable with no negative cumulative mismatches across all time buckets.

OUTLOOK

GDP for the country is projected to grow at 7.2% during FY 25 supported by resilient domestic activity, robust investment and government consumption. Commercial Vehicle (CV) industry growth will largely come from improvement in macroeconomic environment and healthy traction in underlying industries such as mining, infrastructure, and construction. Credit demand across majority of retail assets to remain strong. Asset quality to remain at healthy levels. Favourable demographics, moderating a_ordability, and low inventory to result in sustained end-user demand in residential real estate. The underpenetrated market and the Government's thrust on ‘housing for all' are likely to support growth. Micro MSME segment is leading growth within India's MSME credit market and credit growth momentum to continue in FY 25.

CHANGE IN NATURE OF BUSINESS

There has been no change in the existing nature of business and operations of the company. During the year, the Insurance Regulatory and Development Authority of India ("IRDAI") had granted a license to the Company to act as composite corporate agent for solicitation and procurement of insurance business for life insurers, general insurers and health insurers as specified under IRDAI Regulations.

Dividend distribution policy

The company has formulated a dividend distribution policy in compliance with regulation 43A of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (Listing Regulations), a copy of which is available on the website of the company. (weblink: https://www.cholamandalam.com/files/dividend-distribution-policy)

Payment of dividend

The company paid an interim dividend on the equity shares at the rate of 65% (Rs. 1.30/- per equity share) as approved by the Board on 25 January, 2024 for the year ended 31 March, 2024.

Your directors are pleased to recommend a final dividend of 35% ( Rs. 0.70/- per equity share) on the equity shares of the company. With this, the total dividend will be 100% (Rs. 2/- per equity share) for the year ended 31 March, 2024.

TRANSFER TO RESERVES

Your company transferred a sum of Rs. 690 crores to statutory reserve as required under the Reserve Bank of India Act, 1934. During the year, no amount was transferred totgeneral reserves.

FIXED DEPOSITS

The company is a non deposit taking NBFC. The company does not hold or accept deposits as of the date of balance sheet.

RBI LICENSE

The company is a NBFC - Investment and Credit Company (NBFC-ICC). The company has been notified as a NBFC in Upper Layer (NBFC-UL) by the Reserve Bank of India under the Scale Based Regulatory Framework for NBFCs.

CAPITAL ADEQUACY

The company's capital adequacy ratio was at 18.57% as on 31 March, 2024 as against the statutory minimum capital adequacy of 15% prescribed by RBI. The Common Equity Tier 1 (CET1) capital was at 14.74 % and Tier I capital was at 15.10% as against the statutory minimum requirement of 9% and 10% respectively. Tier II capital was at 3.47 % as on 31 March, 2024.

EMPLOYEE STOCK OPTION (ESOP) SCHEME

Pursuant to the approval accorded by the shareholders on 3 January, 2017 the nomination and remuneration committee had formulated an employee stock option scheme 2016 (ESOP 2016).

During the year, the company made grants aggregating to 10,90,200 options to 107 employees. The total number of options issued as on 31 March, 2024 under ESOP 2016 was at 53,23,901.

The scheme is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI (SBEB) Regulations) and the Companies Act, 2013 (the Act).

The certificate from secretarial auditor M/s. R. Sridharan & Associates, company secretaries confirming implementation of ESOP 2016 scheme in accordance with the SEBI (SBEB) Regulations and shareholders resolutions has been obtained and will be available for inspection of the shareholders at the ensuing annual general meeting (AGM). The details of the scheme as on

31 March, 2024 are disclosed on the website of the company.

(weblink: https://www.cholamandalam.com/investors/esop)

Appointment / Re-appointment

Mr. M R Kumar, former chairman of Life Insurance Corporation of India was appointed as an additional director in the capacity of Independent director with effect from 1 May, 2024. He holds office upto the date of ensuing AGM as additional director. The appointment of Mr. M R Kumar as an independent director upto 5 years from the date of his appointment has been recommended for approval of the shareholders at the ensuing AGM of the company. Ms. Bhama Krishnamurthy, independent director completes her first term of 5 years on 30 July, 2024 and considering her significant contributions, the board considered her re-appointment for a second term of 5 years and is recommended to the shareholders for approval. Mr. Ravindra Kumar Kundu, executive director who retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment and is recommended to the shareholders for approval.

Retirement

Mr. Rohan Verma, independent director retired from the board with effect from the close of business hours of 24 March, 2024, upon completion of his first five-year term. Mr. Rohan Verma informed the board his intent not to proceed with the second term as an independent director of the company in view of his time commitments.

The company had received confirmation from Mr. Rohan Verma that there are no other material reasons other than what has been stated in the letter. The board places on record its deep appreciation for contributions made by Mr. Rohan Verma to the Board deliberations during his term and for his guidance and support as the Chairman of IT Strategy Committee.

DECLARATION FROM INDEPENDENT DIRECTORS

All the independent directors (IDs) have submitted their declaration of independence, as required pursuant to section 149(7) of the Act, confirming that they meet the criteria of independence as provided in section 149 (6) of the Act. In the opinion of the board, the IDs fulfil the conditions specified in the Act and the rules made there under for appointment as IDs including integrity, expertise and experience and confirm that they are independent of the management. All the IDs of the company have registered their names with the data bank of IDs and completed online pro_ciency self-assessment test as per the timeline notified by the Ministry of Corporate Affairs (MCA).

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of section 203 of the Act read with the rules made there under, the following employees were the whole time key managerial personnel of the company during FY 24: a) Mr. Ravindra Kumar Kundu, Executive Director b) Mr. D. Arulselvan, Chief Financial Officer and c) Ms. P. Sujatha, Company Secretary

DIRECTORS' RESPONSIBILITY STATEMENT

The directors' responsibility statement as required under section 134(5) of the Act, reporting the compliance with accounting standards, is attached and forms part of the board's report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant and material orders passed by the regulators or courts or tribunals which would impact the going concern status of the company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no significant material changes and commitments affecting the financial position of the company that occurred between the end of financial year and the date of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Themanagementdiscussionandanalysisreport(MDA),highlighting the business-wise details are attached and forms part of this report. MDA also contains the details of the risk management framework of the company including the development and implementation of risk management policy and the key risks faced by the company.

CORPORATE GOVERNANCE REPORT

A report on corporate governance as per the SEBI (Listing Obligations and Disclosure Requirements), 2015 (Listing Regulations) is attached and forms part of this report. The report also contains the details as required to be provided on the composition and category of directors, number of meetings of the board, composition of the various committees, annual board evaluation, remuneration policy, criteria for board nomination and senior management appointment, whistle blower policy / vigil mechanism, disclosure of relationships between directors inter-se, state of company's affairs, etc. The executive director and the chief financial officer have submitted a compliance certificate to the board regarding the financial statements and other matters as required under regulation 17(8) of the Listing Regulations.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The company being in top 1000 listed entities based on market capitalization, in terms of Regulation 34(2)(f) of SEBI Listing Regulations read with SEBI master circular dated 11 July, 2023, a business responsibility and sustainability report is attached and forms part of this report. Further, as per SEBI circular on BRSR Core – Framework for assurance and ESG disclosures for value chain dated

12 July, 2023, the company being in top 150 listed entities, has undertaken reasonable assurance of the BRSR Core during the year.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statement has been prepared in accordance with the Act and the relevant accounting standards and forms part of this annual report.

AUDITORS

M/s. Price Waterhouse LLP, and M/s. Sundaram & Srinivasan, chartered accountants are the joint statutory auditors of the company. They were appointed as joint statutory auditors at the 43^rd AGM held on 30 July, 2021 for a period of three years commencing from the conclusion of 43^rd AGM till the conclusion of 46^th AGM. The statutory audit report is attached with financial statements and forms part of this report and does not contain any qualification, reservation or adverse remarks. The Board of directors have proposed to appoint M/s. B.K. Khare

& Co. and M/s. KKC & Associates LLP as joint statutory auditors of the company for a period of three years from the closure of 46^th AGM till the closure of 49^th AGM, and recommended the same to the shareholders for approval.

SECRETARIAL AUDIT

Pursuant to the provisions of the Act and the rules framed there under, M/s. R. Sridharan & Associates, company secretaries had undertaken a secretarial audit of the company for FY 24. The secretarial audit report is attached and forms part of this report and does not contain any qualification, reservation, or adverse remarks.

COST RECORD AND COST AUDIT ANNUAL RETURN

Maintenance of cost records and requirements of cost audit as prescribed under the provisions of section 148(1) of the Act is not applicable for the business activities carried out by the company.

ANNUAL RETURN

In accordance with sections 134(3)(a) and 92(3) of the Act, the annual return in form MGT-7 is placed on the website of the company and is available on the (weblink: https://www.cholamandalam.com/files/ annual-return-fy-2023-2024)

CORPORATE SOCIAL RESPONSIBILITY

The Murugappa group is known for its tradition of philanthropy and community service. The group's philosophy is to reach out to the community by establishing service-oriented philanthropic institutions in the field of education and healthcare as the core focus areas. The company upholds the group's tradition by earmarking a part of its income for carrying out its social responsibilities.

The company has been carrying out corporate social responsibility (CSR) activities for many years even before it was mandated under the Act. The company has in place a CSR policy. The policy along with composition of CSR committee and projects approved by the board are available on the website of the company. (Weblink: https://www. cholamandalam.com/files/csr-policy)

As per the provisions of the Act, the company is required to spend at least 2% of the average net profits of the company made during the three immediately preceding financial years. This amount aggregated to Rs. 56.86 crores and the company had spent a marginally higher amount of Rs. 56.98 crores towards CSR activities during FY 24, the details of which are annexed to and forms part of this report.

INTERNAL FINANCIAL CONTROLS

The company has in place a comprehensive Internal control framework including clear delegation of authority and standard operating procedures that are established and laid out across all businesses and functions. The framework is reviewed periodically at all levels. The risk and control matrices are reviewed on a quarterly basis and control measures are tested and documented. These measures have helped in ensuring the adequacy of internal financial controls commensurate with the scale of operations of the company. The internal financial controls with reference to the financial statements were tested and reported adequate.

RELATED PARTY TRANSACTIONS

The company has in place a policy on related party transactions as approved by the board and the same is available on the website of the company (weblink: https://www.cholamandalam.com/files/ policy-on-related-party-transactions)

All transactions with related parties that were entered into during the financial year were in the ordinary course of business and were on an arm's length basis. There were no materially significant transactions with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the company at large. There were no contracts or arrangements entered into with related parties during the year to be disclosed under sections 188(1) and 134(h) of the Act in form AOC-2. All proposed transactions with related parties were placed before the audit committee for prior approval at the beginning of the financial year/quarter. Omnibus approval for transactions that cannot be foreseen or envisaged were obtained as permitted under the applicable laws and the thresholds are periodically reviewed. The transactions entered into pursuant to the approval so granted were placed before the audit committee for its review on a quarterly basis.

INFORMATION AS PER SECTION 134(3)(m) OF THE ACT

During the year under review, the company had no major impact on account of conservation of energy or technology absorption. Foreign currency expenditure / remittances amounting to

Rs. 479.47 crores towards repayment of overseas borrowing and interest, software license fees, travel and other professional charges were incurred during the year under review. The company does not have any foreign exchange earnings.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Being a NBFC, the disclosures regarding particulars of loans given, guarantees given and security provided is exempted under the provisions of section 186(11) of the Act. With regard to investments made by the company, the details of the same are provided under note 10 in standalone financial statements and note 12 in consolidated financial statements of the company for the year ended 31 March, 2024.

DISCLOSURE OF REMUNERATION

The disclosure with respect to remuneration as required under section 197 of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and forms part of this report.

PARTICULARS OF EMPLOYEES

In accordance with section 136 of the Act, the financial statements are being sent to the members and others entitled thereto. The statement prescribed under rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is available for inspection of the shareholders at the ensuing annual general meeting (AGM). If any member is interested in obtaining a copy, such member may send an e-mail to the company secretary in this regard.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The company complied with all the provisions of secretarial standards issued by the Institute of Company Secretaries of India in respect of meetings of the board of directors and general meetings held during the year.

INTERNAL COMPLAINTS COMMITTEE

The company has in place a policy for prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The company has complied with the provisions relating to constitution of internal complaints committee (ICC) under the POSH Act. ICC has been set up to redress complaints received regarding sexual harassment. All employees including contract workers, probationer, trainee, apprentice or any person so employed at the workplace called by any other such name are covered under this policy. During the year, the company conducted awareness for employees about POSH Act. During the calendar year ended 31 December, 2023, neither any complaints of sexual harassment were received by the Internal Compliance Committee, nor were there any complaints relating thereto which required any disposal thereof.

OTHER DISCLOSURES

There was no fraud reported by auditors of the company as given under Section 143 (12) of the Companies Act, 2013 (Read with Companies (Audit and Auditors) Rules, 2014). During the year ended 31 March, 2024, the company had not made any application under the Insolvency and Bankruptcy Code, 2016 ("the Code"). As at 31 March, 2024, total number of applications filed and pending under the Code are 10 cases amounting to

Rs. 49.65 crores. No proceeding is pending against the company under the Code. During the year, the company had not made any one-time settlement with banks or financial institutions.

CHOLAMANDALAM SECURITIES LIMITED (CSEC)

In FY 24, CSEC focused on verticalization of client segment into private client group, retail, institution and partner alliance channels, which resulted growth in broking and other businesses and a growth in Profit Before Tax (PBT). CSEC achieved a gross income of

Rs. 156.85 crores for the year ended 31 March, 2024 and made a PBT of

Rs. 84.20 crores as against a PBT of Rs. 8.68 crores in the previous year. The mutual fund AUM was at Rs. 925.41 crores. During the year, CSEC declared special / interim dividends cumulating to 298.50%.

CHOLAMANDALAM HOME FINANCE LIMITED (CHFL)

CHFL recorded a gross income of Rs. 186.05 crores for the year ended 31 March, 2024 and made a profit before tax of

Rs. 63.25 crores as against profit of Rs. 7.66 crores in the previous year. CHFL declared interim dividends cumulating to 112%. CHFL has submitted an application for surrender of the corporate agency license with IRDAI. The application is pending for approval.

VISHVAKARMA PAYMENTS PRIVATE LIMITED (VPPL)

The company forms part of the consortium for retail payments – VPPL that had applied for a New Umbrella Entity (NUE) License for retail payments with Reserve Bank of India in the year March 2021. The company holds 21% of equity share capital of VPPL. The application is pending for approval hence, the company is in principle looking to exit from the consortium formed for the purpose of obtaining NUE license.

PAYSWIFF TECHNOLOGIES PRIVATE LIMITED (PTPL)

PTPL recorded a gross income of Rs. 135.57 crores for the year ended 31 March, 2024 and made a loss of Rs. 2.17 crores as against a loss of Rs. 12.03 crores in the previous year. As on 31 March, 2024, the company holds 74.68% of the equity share capital of PTPL.

ACKNOWLEDGEMENT

The directors wish to thank the company's customers, vehicle manufacturers, vehicle dealers, channel partners, banks, mutual funds, rating agencies and shareholders for their continued support. The directors also thank the employees of the company for their contribution to the company's operations during the year under review.