Your Directors' have pleasure in presenting the forty seventh annual report together with the audited accounts of the Company for the year ended 31 March, 2025.

Rs' in crores

During the year, there was an increase in paid up capital by Rs 0.19 crores, consequent to allotment of shares upon exercise of stock options by employees under the Company's employee stock option scheme. Total paid up equity share capital of the Company as at 31 March 2025 is "168.25 crores.

India's auto industry grew 7.3% in FY25 with record passenger vehicle sales and a 19.2% jump in exports, driven by strong demand, policy support, and rising interest in electric mobility. AUM of retail NBFC growth in FY25 witnessed slowdown and is expected at 17-19%, compared to 29% growth in FY24. The slowdown in growth is largely emerging from unsecured asset segments, such as the MFI Personal and Consumer Loans, primarily due to stricter underwriting and disbursement practices. (Source- icra, siam)

The Company has crossed the milestone of achieving highest ever disbursals at "1,00,869 crores in FY25 with YoY growth at 14%. Disbursements in Vehicle Finance (VF) business grew by 12% in FY25 to "53,922 crores. Disbursements in Loan against property (LAP) business grew by 32% to "17,913 crores in FY25. Disbursements in Home Loans (HL) stood at "7,404 crores in FY25, which is a growth of 16% YoY. Disbursements in Small and Medium Enterprises (SME) stood at "7,763 crores in FY25 which is a marginal de-growth of 4% YoY. Disbursements in Consumer and Small Enterprise Loans (CSEL-Consol) stood at "12,552 crores which is a growth of 11% YoY. Disbursements in Secured Business & Personal Loans (SBPL) grew by 23% in FY25 to "1,316 crores. The business AUM of the

Company stood at "1,84,746 crores which is a growth of 27% YoY. The profit before tax of the Company for FY 2024-25 is "5,737 crores as against "4,582 crores for FY 2023-24, which is a growth of 25% YoY. The Company continues to hold a strong liquidity position with Rs 15,267 crores as cash and liquid asset balances as at end of March 2025 (including Rs 3,375.31 crores invested in Gsec & SDL/ Rs 1,721.41 crores invested in T-Bill & Rs 771.91 crores invested in Strips shown under investments), with a total liquidity position of Rs 15,712 crores (including undrawn sanctioned lines).

The ALM had no negative cumulative mismatches across all time buckets.

In response to economic challenges, RBI reduced the repo rate to 6% by early 2025 and shifted its policy stance from neutral to accommodative. The combination of income-tax relief in the Union Budget for FY26, rate cuts leading to lower Equated Monthly Instalments (EMIs), and a moderation in food inflation is expected to boost household disposable incomes and urban consumption in FY26. However, the retail AUM of NBFCs (excluding HFCs) is projected to grow at a moderated pace of 16-18% in FY26. This growth rate is slightly lower than the levels seen in FY25, with potential downside risks arising from global macroeconomic uncertainty impacting domestic economic activity. (Source- ICRA)

There has been no change in the existing nature of business and operations of the Company.

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. Payment of dividend

The Company paid an interim dividend on the equity shares at the rate of 65% (" 1.30/- per equity share) as approved by the Board on 31 January, 2025 for the year ended 31 March, 2025.

Your Directors' are pleased to recommend a final dividend of 35% (" 0.70/- per equity share) on the equity shares of the Company. With this, upon approval of the same by the shareholders, the total dividend will be 100% (" 2/- per equity share) for the year ended 31 March, 2025.

The Company transferred a sum of Rs 860 crores to statutory reserve as required under the Reserve Bank of India Act, 1934.

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

The Company is an NBFC - Investment and Credit Company (NBFC- ICC). The Company also has a license to do factoring business (NBFC-F). The Company is notified as an NBFC in Upper Layer (NBFC-UL) by the Reserve Bank of India under the Scale Based Regulatory Framework for NBFCs. The Company also has a Composite Corporate Agency License from Insurance Regulatory and Development Authority of India, to operate as a corporate insurance agent.

The Company's capital adequacy ratio was at 19.75% as on 31 March, 2025 as against the statutory minimum capital adequacy threshold of 15% prescribed by RBI. The Common Equity Tier 1 (CET1) capital was at 13.68% and Tier I capital was at 14.41% as against the statutory minimum requirement of 9% and 10% respectively. Tier II capital was at 5.34% as on 31 March, 2025.

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 17,23,960 options to 188 employees. The total number of options outstanding as on 31 March, 2025 under ESOP 2016 is at 59,32,718 (represents vested exercisable and unvested options).

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, 2025 and the certificate is disclosed on the website of the Company.

Mr. Ravindra Kumar Kundu, was appointed as the Managing Director of the Company for a term of 5 years commencing from 7 October, 2024 to 6 October, 2029. He held the position of Executive Director till 6 October, 2024.

Mr. Ramkumar Ramamoorthy was appointed as an Additional Director in the capacity of an Independent Director of the Company for a term of 5 years commencing from 26 July, 2024 to 25 July, 2029.

The above appointment of Mr. Ravindra Kumar Kundu as Managing Director and the appointment of Mr. Ramkumar Ramamoorthy as an Independent Director for the said periods were approved by the shareholders on 7 September, 2024 vide a postal ballot.

Ms. Bhama Krishnamurthy was re-appointed as an Independent Director of the Company for a second consecutive term of 5 years commencing from 31 July, 2024 to 30 July, 2029.

Mr. M R Kumar was appointed as an Independent Director of the Company for a term of 5 years commencing from 1 May, 2024 to 30 April, 2029.

The above re-appointment of Ms. Bhama Krishnamurthy and the appointment of Mr. M.R. Kumar as Independent Directors for the said periods were approved by the shareholders at the 46^th Annual General Meeting.

Mr. Vellayan Subbiah, Non-Executive Chairman was appointed as a Whole-time Director designated as Executive Chairman for a term of 5 years commencing from 1 April, 2025 to 31 March, 2030, subject to the approval of shareholders.

Mr. M AM Arunachalam, Non-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.

All Directors have confirmed that they satisfy the 'fit and proper' criteria as prescribed under RBI (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023.

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, experience and proficiency 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 proficiency self-assessment test as per the timeline notified by the Ministry of Corporate Affairs (MCA).

Pursuant to the provisions of section 203 of the Act read with the rules made there under, the following employees are the whole time key managerial personnel of the Company as on date of this report:

a) Mr. Vellayan Subbiah, Executive Chairman (effective 1 April, 2025)

b) Mr. Ravindra Kumar Kundu, Managing Director

c) Mr. D. Arulselvan, Chief Financial Officer and

d) Ms. P. Sujatha, Company Secretary

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.

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.

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.

The Management Discussion and Analysis report (MDA), highlighting the business-wise details is 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.

A report on Corporate Governance as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 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 Managing 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.

The Company being in top 100 listed entities based on market capitalization, in terms of Regulation 34(2)(f) of Listing Regulations read with SEBI master circular dated 11 November, 2024, 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 has undertaken reasonable assurance of the BRSR Core during the year and the same is enclosed.

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

M/s. B.K. Khare & Co. and M/s. KKC & Associates LLP, Chartered Accountants are the joint statutory auditors of the Company. They were appointed as joint statutory auditors at the 46^th AGM held on 26 July, 2024 for a period of three years commencing from the conclusion of 46^th AGM till the conclusion of 49^th AGM. The statutory audit report is attached with financial statements and forms part of this report and does not contain any qualification, reservation, adverse remark or any disclaimer.

M/s. R. Sridharan & Associates, Company Secretaries were appointed as the Secretarial Auditors of the Company for FY 2024-25. The Secretarial Audit Report forms part of this report and does not contain any qualification, reservation, adverse remark or any disclaimer.

Pursuant to Regulation 24A of Listing Regulations, the Board of Directors have recommended to the shareholders for approval, the appointment of M/s. BP & Associates as Secretarial Auditors of the Company for a term of five (5) consecutive years, from FY 2025-26 to FY 2029-30.

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.

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: httDs://www.cholamandalam.com/investors

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 Board approved CSR policy. The policy and details on the 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-policv-2025)

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, which aggregated to Rs 73.18 crores. In FY 2024-25, the Company has spent Rs 74.24 crores and an excess amount of Rs 1.00 crore shall be carried forward and adjusted in the CSR spend for FY 2025-26. The details of the CSR activities is annexed hereto and forms part of this report.

During the year, the Company formed a Trust under the name "Chola Foundation" for direct implementation of various CSR activities. Further, Chola Foundation has been registered as an implementation agency under the Companies Act, 2013.

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.

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 . 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. An omnibus approval of the Audit Committee was obtained for the transactions of the Company proposed to be entered into with related parties at the beginning of the financial year including for any unforeseen transactions with related parties up to Rs 1 crore per transaction per party. The transactions entered into pursuant to the approval so granted were placed before the audit committee for its review on a quarterly basis.

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 1,568.03 crores towards repayment of overseas borrowing and interest, travel and other professional charges were incurred during the year under review. The Company does not have any foreign exchange earnings.

Being an 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, 2025.

The disclosure with respect to remuneration as required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and forms part of this report.

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.

The Company has 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.

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, probationers, trainees, apprentices 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. The details on complaints received under this policy is provided in the report on corporate governance (refer page no. 88).

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 FY 2024-25 requiring a disclosure in the Board's report.

During the year ended 31 March, 2025, the Company had not made any application under the Insolvency and Bankruptcy Code, 2016 ("the Code"). As at 31 March, 2025, total number of applications filed and pending under the Code are 10 cases amounting to Rs 42.41 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.

During FY 2024-25, CSEC remained focussed on maintaining operational efficiency and strengthening its business and demonstrated resilience in spite of challenges. CSEC achieved a gross income of Rs 104.44 crores and a Profit before Tax of Rs 10.85 crores during the year ended 31 March, 2025. As at 31 March, 2025, the Company directly holds 92% of equity share capital of CSEC and the balance 8% is held through Cholamandalam Leasing Limited, making CSEC a wholly owned subsidiary.

CLL recorded a gross income of Rs 3.45 crores for the year ended 31 March, 2025 and made a loss of Rs 0.45 crores as against profit of Rs 63.25 crores in the previous year. CLL declared an interim dividend at the rate of 14% on 20 March, 2025. As at 31 March, 2025, CLL is a wholly owned subsidiary of the Company.

CLL had surrendered its license as a corporate agent with composite license from Insurance Regulatory and Development Authority of India (IRDAI) for distributing insurance products on 27 August, 2024.

During the year, the CLL's Board and shareholders approved amendments to the Object clause of the Memorandum of Association enabling the company to undertake leasing business. Consequently, Subsequently, the name of the company was changed from Cholamandalam Home Finance Limited to Cholamandalam Leasing Limited on 24 January, 2025 to reflect the proposed line of business.

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.

PTPL recorded a gross income of Rs 110.87 crores for the year ended 31 March, 2025 and made a profit of Rs 6.27 crores as against a loss of Rs 2.17 crores in the previous year. As on March 31, 2025, the Company holds 74.63% of the equity share capital of PTPL.

The Directors wish to thank the Company's customers, regulators, 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.

On behalf of the board

Directors' Responsibility Statement

The Board of Directors have instituted / put in place a framework for internal financial controls and compliance systems, which is reviewed

by the management and the relevant Board committees, including the audit committee and independently reviewed by the internal

auditors, joint statutory auditors and Secretarial Auditors.

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures therefrom.

b) they have, in the selection of the accounting policies, consulted the joint statutory auditors and have applied their recommendations 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 as at 31 March, 2025 and of the profit of the Company for the year ended on that date;

c) they have taken proper and sufficient care 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 fraud and other irregularities.

d) they have prepared the annual accounts on a going concern basis.

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year ended 31 March, 2025; and

f) proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended 31 March, 2025.