Notes to Accounts of Cholamandalam Financial Holdings Ltd.

Mar 31, 2025

b) Terms/rights attached to Equity shares

The Company has only one class of equity shares having par value of ''1 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend.

Repayment of capital will be in proportion to the number of equity shares held.

Nature and purpose of reserves Note 13.1 General Reserve

Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if dividend distribution in a given year is more than 10.00% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to introduction of Companies Act, 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit or loss to the General reserves.

The management of the Company assessed that fair value of cash and cash equivalents including bank balances, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the Credit spread considered by the lenders for instruments of the similar maturity.

Note 18.1 - Fair Values Hierarchy

a) Financial Assets carried at Fair Values

This note provides information about how the Company determines fair value of various financial assets. Fair value of the Company''s financial assets that are measured at fair value on a recurring basis.

Some of the Company''s financial assets are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation techniques and inputs used)

Based on management''s assessment, Investment in certain equity instrument have been transferred from Level 1 to Level 2 based on the volume of transactions and other market observable inputs.

Note:

(a) These investments in equity instruments are not for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the Management believes that this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

(b) These investment in equity are not significant in value and hence additional disclosures are not presented.

The preparation of the Company''s financial statements requires management of the Company to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In the process of applying the Company''s accounting policies, the management has made the following judgement /estimate, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Fair value of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), funding value adjustments, correlation and volatility.

The Company has operations in India. Whilst risk is inherent in the Company''s activities, it is managed through a risk management framework, including ongoing identification, measurement and monitoring subject to risk limits and other controls. The Company''s activities expose it to credit risk, liquidity risk and market risk.

The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as credit risk, liquidity risk and investment of available funds.

Note 25.1. Credit risk

The Company being a Core Investment Company, credit risk refers to the risk that a counter party may default on its contractual obligations leading to a financial loss to the Company. Credit risk primarily arises from cash and cash equivalents, financial assets measured at amortised cost and financial assets measured at fair value through profit or loss.

Note 25.2. Liquidity Risk

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to the Company on acceptable terms. The Company has developed internal control processes and contingency plans for managing liquidity risk.

The Company''s principal sources of liquidity are "cash and cash equivalents" and cash flows that are generated from operations. The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar nature thereby ensuring safety of capital and availability of liquidity as and when required.

Refer Note 19.1 for the summary of maturity profile of undiscounted cashflows of the Company''s financial assets and financial liabilities as at reporting period.

The Leverage Ratio is 0.0002 as at March 31, 2025 (0.0001 as at March 31, 2024) as against the regulatory cap of 2.5 Note 25.3. Interest rate risk

Interest rate risk is the fair value of future cash flows of a financial instrument which fluctuates because of changes in the market interest rates.

Note 25.4. Price risk

The Company''s exposure to equity securities risk arises from investments held by the Company.

Majority of the Company''s investment are publicly traded in the NSE and BSE.

As regards investments in unlisted privately held companies, the fair valuations are largely dependent on the investee Company''s ability to achieve desired outcomes which measure the performance of the Company and bear out the valuation of its ownership interests. Hence, these are also exposed to market / operational risks of the investee companies.

Capital Management

The primary objectives of the Company''s capital management policy are to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios to support its core investment activity and to maximize shareholder value.

The Company manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes have been made to the objectives, policies and processes from the previous years. However, they are reviewed on a periodic basis.

The Capital Ratio is 1999.12% as at March 31, 2025 (1763.36% as at March 31, 2024) as against the regulatory minimum of 30%.

Note 27. Segment reporting

The Company''s main business is to invest in securities of group companies for strategic purposes. All other activities of the Company revolve around the main business. As such there are no separate reportable segments.

Note 28. Additional Information as required by Reserve Bank of India, Master Direction - Core Investment Companies (Reserve Bank) Directions, RBI/DNBR/2016-17/39, Master Direction DNBR. PD. 003/03.10.119/2016-17, August 25, 2016, DOR (NBFC). CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 & DoR (NBFC) (PD) CC. No. 117/03.10.001/2020-21 dated August 13, 2020, DOR.ACC.REC.No.20/21.04.018/2022-23, April 19, 2022, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023.

These disclosures have been prepared based on standalone financial statements in line with Reserve Bank of India notification dated March 13, 2020.

Note 28.15 Concentration of Non Performing Assets (NPAs) - Nil for current and previous year.

Note 28.16 Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) - Nil for current and previous year Note 28.17 Public disclosure on liquidity risk

(i) Funding concentration based on significant counterparty (both deposits and borrowings) - Not applicable for current and previous year.

(ii) Top 20 large deposits (amount and % of total deposits) - Not applicable for current and previous year

(iii) Top 10 borrowings (amount and % of total borrowings) - Not applicable for current and previous year

(iv) Funding concentration based on significant instrument / product - Not applicable for current and previous year

(v) Stock ratios: Ratios relating to Commercial papers and Non-convertible debentures are not applicable for current and previous years.

(vi) Institutional set-up for liquidity risk management:

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to the Company on acceptable terms. The Company has developed internal control processes and contingency plans for managing liquidity risk.

The Company does not have any exposure for the items required in sl no. (ii) to (x) of the circular in both the years.

3) Sectoral exposure

The Company is not into lending activity and hence the exposure is NIL in both the years.

4) Intra-group exposures

The Company does not have any intra group loan exposure in both the years.

5) Unhedged foreign currency exposure

The Company does not have any foreign currency exposure in both the years.

6) Derivatives

The Company does not have any derivatives exposure in both the years.

C) Disclosure of complaints

1) Summary information on complaints received by the company from customers and from the Officers of Ombudsman

The company does not have any customer interface and hence this disclosure is not applicable for it.

2) Top five grounds of complaints received by the company from the customers

The company does not have any customer interface and hence this disclosure is not applicable for it.

Section II

A) Breach of covenant

Not applicable as the company does not have any borrowing as at the end of current and previous year.

B) Divergence in Asset Classification and Provisioning

The company does not have any loan exposure and hence the divergence in Asset Classification and Provisioning does not apply to it.

As at March 31, 2025 and March 31, 2024 there is no interest paid or payable to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006. This Information has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 30.2. Part II - Other disclosures

Note 30.2.1. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

Note 30.2.2. The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority.

Note 30.2.3. As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

Note 30.2.4. There has been no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

Note 30.2.5. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries)

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 30.2.6. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provided any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 30.2.7. Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended March 31, 2025

Note 31. Events after reporting date

There have been no events after the reporting date that require disclosure in the financial statements.

Note 32. Prior Period Comparatives

Previous year figures have been regrouped / re-classified wherever necessary to conform to current year''s classification.

Mar 31, 2024

Note - 3.3 Provisions and Contingent Liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When the effect of the time value of money is material, the Company determines the level of provision by discounting the expected cash flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the Financial Statements.

The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

Note - 3.5 Determination of Fair value

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. In order to show how fair values have been derived, financial instruments are classified based on a

hierarchy of valuation techniques, as summarised below:

(i) Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.

(ii) Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrumentâs life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

(iii) Level 3 financial instruments - Those that include one or more unobservable input that is significant to the measurement as whole.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company evaluates the levelling at each reporting period on an instrument-by-instrument basis and reclassifies instruments, when necessary, based on the facts at the end of the reporting period.

Cash and cash equivalents comprise cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in value.

Note - 3.7 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

For the purpose of the Statement of cash flows, cash and cash equivalents as defined above, are net of outstanding bank overdrafts, if any, as they are considered an integral part of the cash management of the Company.

Note - 3.8 Goods and Service Tax (GST) Input Credit

Input Tax Credit is accounted for in the books in the period when the underlying service / supply received is accounted, and when there is no uncertainty in availing / utilising the same. Company avails eligible input credit as per the relevant Law and the ineligible credit is set off to respective expense.

Note - 3.9 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in statement of profit and loss in the period in which the expenditure is incurred.

Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption

of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Amortisation is calculated using the straight-line method to write down the cost of intangible assets to their residual values over their estimated useful life of 3 years.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

Note - 3.10 Impairment of Financial & Non-Financial

Assets

Note - 3.10.1 Impairment of Financial Assets

For financial assets for which the Company has no

reasonable expectations of recovering either the entire outstanding amount, or a proportion thereof, the gross carrying amount of the financial asset is provided for / written-off.

Note - 3.10.2 Impairment of Non-Financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the assetâs recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

Note - 21. Significant accounting judgements, estimates and assumptions:

The preparation of the Companyâs financial statements requires management of the Company to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In the process of applying the Companyâs accounting policies, the management has made the following judgement / estimate, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Fair value of financial instruments

Note - 27.1 Credit risk

Note - 27.2 Liquidity Risk

The Companyâs principal sources of liquidity are âcash and cash equivalentsâ and cash flows that are generated from operations. The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar nature thereby ensuring safety of capital and availability of liquidity as and when required.

Refer Note 20.1 for the summary of maturity profile of undiscounted cashflows of the Companyâs financial assets and financial liabilities as at reporting period.

The Leverage Ratio is 0.0001 as at March 31,2024 (0.004 as at March 31,2023) as against the regulatory cap of 2.5 Note - 27.3 Interest rate risk

Interest rate risk is the fair value of future cash flows of a financial instrument which fluctuates because of changes in the market interest rates.

Note - 27.4 Price risk

The Companyâs exposure to equity securities risk arises from investments held by the Company.

Majority of the Companyâs investment are publicly traded in the NSE and BSE.

As regards investments in unlisted privately held companies, the fair valuations are largely dependent on the investee Companyâs ability to achieve desired outcomes which measure the performance of the Company and bear out the valuation of its ownership interests. Hence, these are also exposed to market / operational risks of the investee companies.

Capital Management

The primary objectives of the Companyâs capital management policy are to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios to support its core investment activity and to maximize shareholder value.

The Capital Ratio is 1763.36% as at March 31, 2024 (1123.23% as at March 31, 2023) as against the regulatory minimum of 30%.

(vi) Institutional set-up for liquidity risk management:

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to the Company on acceptable terms. The Company has developed internal control processes and contingency plans for managing liquidity risk.

Note - 32.2 Part II - Other disclosures

32.2.1 No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

32.2.2 The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority.

32.2.3 As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

32.2.4 There has been no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

32.2.5 The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries)

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

32.2.6. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provided any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

32.2.7. Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended March 31,2024.

Note - 33. Events after reporting date

There have been no events after the reporting date that require disclosure in the financial statements.

Note - 34. Prior Period Comparatives

Previous year figures have been regrouped / re-classified wherever necessary to conform to current yearâs classification.

As per our report of even date

For Sharp & Tannan Associates For and on behalf of the Board of Directors

Chartered Accountants ICAI Firm Regn No.109983W

Tirtharaj Khot Sridharan Rangarajan M M Murugappan

Partner Director Chairman

Membership No: (F) - 037457 DIN:01814413 DIN:00170478

Date : May 10, 2024 E Krithika N Ganesh

Place : Chennai Company Secretary Manager & Chief Financial Officer

Mar 31, 2023

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

ii. The fair value of borrowings is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return, adjusted for the credit spread considered by the lenders for instruments of the similar maturity.

Note - 19.1 Fair Values Hierarchy a) Financial Assets carried at Fair Values

This note provides information about how the Company determines fair value of various financial assets. Fair value of the Companyâs financial assets that are measured at fair value on a recurring basis.

Some of the Companyâs financial assets are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation techniques and inputs used)

Note - 21. Significant accounting judgements, estimates and assumptions:

Fair value of financial instruments

Note - 27. Financial Risk Management

The Company has operations in India. Whilst risk is inherent in the Companyâs activities, it is managed through a risk management framework, including ongoing identification, measurement and monitoring subject to risk limits and other controls. The Companyâs activities expose it to credit risk, liquidity risk and market risk.

The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as credit risk, liquidity risk and investment of available funds.

Note - 27.1 Credit risk

Note - 27.2 Liquidity Risk

Refer Note 21.1 for the summary of maturity profile of undiscounted cashflows of the Companyâs financial assets and financial liabilities as at reporting period.

The Leverage Ratio is 0.004 as at March 31,2023 (0.01 as at March 31,2022) as against the regulatory cap of 2.5 Note - 27.3 Interest rate risk

Interest rate risk is the fair value of future cash flows of a financial instrument which fluctuates because of changes in the market interest rates.

Note - 27.4 Price risk

The Companyâs exposure to equity securities risk arises from investments held by the Company and classified in the balance sheet as fair value through OCI.

Majority of the Companyâs investment are publicly traded in the NSE and BSE.

Capital Management

The Capital Ratio is 1,123.23% as at March 31, 2023 (942.78% as at March 31, 2022) as against the regulatory minimum of 30%.

C) Disclosure of complaints1) Summary information on complaints received by the company from customers and from the Officers of Ombudsman

The company does not have any customer interface and hence this disclosure is not applicable for it.

2) Top five grounds of complaints received by the company from the customers

The company does not have any customer interface and hence this disclosure is not applicable for it.

Section IIA) Breach of covenant

There was no breach of covenant of debt securities issued by the company during the financial year 2022-23 and 2021-22.

B) Divergence in Asset Classification and Provisioning

The company does not have any loan exposure and hence the divergence in Asset Classification and Provisioning does not apply to it.

Note - 32.2. Part II - Other disclosures

32.2.2 The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority

32.2.4 There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries)

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provided any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended March 31,2023

Note - 33. Events after reporting date

There have been no events after the reporting date that require disclosure in the financial statements.

Note - 34. Prior Period Comparatives

Previous year figures have been regrouped / re-classified wherever necessary to conform to current yearâs classification.

Mar 31, 2022

e) Shares reserved for issue under options

Refer Note 27 for details of shares reserved for issued under options.

f) Status on Global Depository Receipts (âGDRâ)

The aggregate number of GDRs outstanding as at March 31, 2022 is 23,460 (as at March 31, 2021 - 23,460) each representing one Equity Share of ''1/- face value (Previous Year ''1/- face value). GDR % against total number of shares is 0.01% (as at March 31,2021 - 0.01%). The GDRs carry the same terms / rights attached to Equity Shares of the Company.

Nature and Purpose of reserves Note - 13.1 General Reserve

Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if dividend distribution in a given year is more than 10.00% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to enactment of Companies Act, 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit or loss to the General reserves.

Note - 13.3 FVTOCI Reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

Note - 20.1 Fair Values Hierarchya) Financial Assets carried at Fair Values

(a) These investments in equity instruments are not for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the Management believe that this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

(b) These investment in equity are not significant in value and hence additional disclosures are not presented

Note - 22. Significant accounting judgements, estimates and assumptions:

Fair value of financial instruments

The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as, credit risk, liquidity risk and investment of available funds.

Note - 28.1 Credit risk

Note - 28.2 Liquidity Risk

Refer Note 21.1 for the summary of maturity profile of undiscounted cashflows of the Companyâs financial assets and financial liabilities as at reporting period.

The Leverage Ratio is 0.01 as at March 31,2022 (0.02 as at March 31,2021) as against the regulatory cap of 2.5. Note - 28.3 Interest rate risk

Interest rate risk is the fair value of future cash flows of a financial instrument which fluctuates because of changes in the market interest rates.

Note - 28.4 Price risk

The Companyâs exposure to equity securities risk arises from investments held by the Company and classified in the balance sheet as fair value through OCI.

Majority of the Companyâs investment are publicly traded in the NSE and BSE.

Capital Management

The Capital Ratio is 942.78% as at March 31, 2022 (626.00% as at March 31, 2021) as against the regulatory minimum of 30%.

Note - 30. Segment reporting

The Companyâs main business is to invest in securities of Group Companies for strategic purposes. All other activities of the Company revolve around the main business. As such there are no separate reportable segments.

Note - 31. Additional Information as required by Reserve Bank of India, Master Direction - Core Investment Companies (Reserve Bank) Directions, RBI/DNBR/2016-17/39, Master Direction DNBR. PD. 003/03.10.119/2016-17, August 25, 2016, DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 & DoR (NBFC) (PD) CC. No. 117/03.10.001/2020-21 dated August 13, 2020.

1. Quoted investments are at market value and unquoted investments are at break up/fair value/NAV irrespective of whether they are classified as long term or current in (6) above.

2. The company does not have any exposure to real estate sector, both direct and indirect.

3. Maturity pattern of assets and liabilities are disclosed in Note 21 and analysis of Financial Assets and Financial Liabilities by remaining contractual maturities are disclosed in Note 21.1

(vi) Institutional set-up for liquidity risk management:

Liquidity risk is defined as the risk that the company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to the company on acceptable terms. The company has developed internal control processes and contingency plans for managing liquidity risk.

As at March 31,2022 and March 31,2021 there is no interest paid or payable to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006. This Information has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note - 33.2. Part II - Other disclosures

33.2.1. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder

33.2.2. The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority

33.2.3. As per the information available with the Company, the Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

33.2.4. There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period

33.2.5. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries)

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

Note - 34. Events after reporting date

There have been no events after the reporting date that require disclosure in the financial statements.

Previous year figures have been regrouped / re-classified wherever necessary to conform to current yearâs classification.

Mar 31, 2019

1. Background and Corporate Information

Cholamandalam Financial Holdings Limited (âthe Companyâ, formerly known as TI Financial Holdings Limited) (CIN: L65100TN1949PLC002905) is a Public Limited Company domiciled in India. The Company is listed on BSE Ltd. and National Stock Exchange of India Ltd. The Registered Office of the Company is located at âDare Houseâ, No. 234, NSC Bose Road, Chennai - 600 001, Tamilnadu.

Pursuant to a scheme of arrangement (âthe Schemeâ) the manufacturing business undertaking of the Company was vested in/ transferred to Tube Investments of India Limited (âthe Resulting Companyâ) vide the order of the National Company Law Tribunal, Chennai (âNCLTâ) dated July 17, 2017. The Scheme had an appointed date of April 1, 2016 and came into effect from August 1, 2017. Consequently, the Company became a Core Investment Company. The Companyâs application for registration as a Core Investment Company is pending with the Reserve Bank of India (âRBIâ).

The Company undertakes financial services business through its Subsidiaries - Cholamandalam MS General Insurance Company Limited for general insurance business, Cholamandalam Health Insurance Company Limited for health insurance business and Cholamandalam Investment and Finance Company Limited for lending operations. Risk advisory services is carried out through a joint venture entity Cholamandalam MS Risk Services Limited.

The standalone financial statements are presented in Indian Rupees which is also functional currency of the Company and all values are rounded to the nearest crore, except when otherwise indicated.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on May 03, 2019.

1.1 Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).

For all periods up to and including the year ended March 31, 2018, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP or previous GAAP). These financial statements for the year ended 31 March 2019 are the first the Company has prepared in accordance with Ind AS. Refer to notes for information on how the Company adopted Ind AS.

The standalone financial statements have been prepared on a historical cost basis, except for fair value through other comprehensive income (FVTOCI) instruments and certain financial assets and financial liabilities measured at fair value (refer accounting policy regarding financial instruments).

1.2 Presentation of financial statements

The Company presents its balance sheet in order of liquidity. An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the reporting date (non-current) is presented in notes to the financial statements.

F inancial assets and financial liabilities are generally reported gross in the balance sheet. They are only offset and reported net when, in addition to having an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event, the parties also intend to settle on a net basis in all the following circumstances:

- The normal course of business

- The event of default

- The event of insolvency or bankruptcy of the Company and/or its counterparties

a) Terms / rights attached to Equity shares

The Company has only one class of equity shares having a par value of Rs. 1 per share. All these shares have the same rights and preferences with respect to payment of dividend, repayment of capital and voting. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except for interim dividend.

Repayment of capital will be in proportion to the number of equity shares held.

b) Status on Global Depository Receipts (GDR)

The aggregate number of GDRs outstanding as at 31^st March 2019 is 28,62,253 (as at 31^st March 2018 - 42,30,630) each representing one Equity Share of Rs.1 face value (Previous Year Rs.1 face value). GDR % against total number of shares is 1.52% (as at 31^st March 2018 - 2.26%). The GDRs carry the same terms / rights attached to Equity Shares of the Company.

2.1 General Reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if dividend distribution in a given year is more than 10.00% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit or loss to the General reserves.

2.2 Retained Earnings

The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.

2.3 FVTOCI Reserve

2.4 Statutory Reserve

As per the requirements of Section 45-IC of the Reserve Bank of India Act, 1934, every NBFC is required to transfer 20% of the total profits after tax for the year to a specific reserve by name of Statutory Reserve. The Company based on the above regulation transferred an amount equivalent to 20% of the total profits after tax for the current year to such reserve.

2.5 Securities Premium Account

Securities premium account is used to record the premium on issue of shares. This can be utilised only for specific purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

2.6 Capital Reserve

Capital Reserve represents the amount that has been received as a capital grant from the Government of Maharashtra for the set up of a unit in 2008-09 based on the fulfilment of certain conditions in connection with the set up of such unit. Pursuant to the Scheme of Arrangement for demerger in FY 2016-17, this amount has been retained in the Company.

2.7 Capital Redemption Reserve

Capital redemption reserve represents the amount equal to the nominal value of shares that were redeemed during the prior years. The reserve can be utilized only for specific purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

2.8 Share Application Pending Allotment

Pertains to money received for the allotment of shares pursuant to the Employee Stock Options Scheme. The money collected based on the exercise of the option as per the ESOP scheme will get included here and subsequently on allotment of shares, the balances will be appropriated to share capital and share premium balances.

Proposed dividend

The Board of Directors of the Company have recommended a final dividend of 65% being Rs. 0.65 per share on the equity shares of the Company, for the year ended March 31, 2019 ( Rs. 0.65 per share - March 31, 2018) which is subject to approval of shareholders. Consequently the proposed dividend has not been recognised in the books in accordance with IND AS 10.

For the income that has been received during the year, there are no contract assets / contract liabilities that are outstanding as at March 31, 2019.

Information about Companyâs performance obligation

The performance obligation with respect to brand fee is rendered over annual periods through the contract term.

The management assessed that cash and cash equivalents including Bank balances, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

i. The fair values of quoted equity investments are derived from quoted market prices in active markets.

Note 3.1 - Fair Values Hierarchy

a) Financial Assets carried at Fair Values

Home of the Companyâs financial assets are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation techniques and inputs used).

Note:

(a) These investments in equity instruments are not for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at FVTOCI as the Management believe that this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

(b) These investment in equity are not significant in value and hence additional disclosures are not presented.

Note 4 - First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2019, are the first financial statements the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2018, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP or previous GAAP)

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2019, together with the comparative period data as at and for the year ended 31 March 2018, as described in the summary of significant accounting policies. In preparing these financial statements, the companyâs opening balance sheet was prepared as at 1 April 2017, the companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Group in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2017 and the financial statements as at and for the year ended 31 March 2018.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions/ exceptions:

i) Classification and measurement of financial assets:

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

ii) Impairment of financial assets:

The Company has applied the exception related to impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognized and compared that to the credit risk as at April 1, 2017.

iii) Share Based Payments:

Ind AS 102 Share based Payment has not been applied to equity instruments in share-based payment transactions for the options that have vested before 1^st April, 2017.

iv) Investment in Subsidiaries, Joint ventures and associates:

The Company has elected to measure investment in subsidiaries, joint venture and associate at cost.

v) Business combinations:

In accordance with Ind AS transitional provisions, the Company has elected to apply Ind AS relating to business combinations prospectively from April 01, 2017. As such, previous GAAP balances relating to business combinations entered into before that date, have been carried forward without adjustment.

vi) Estimates:

The estimates are consistent with those made in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from FVTOCI - equity shares and Impairment of financial assets based on expected Credit loss model where application of Indian GAAP did not require estimation.

D. Effects of IND AS adoption on Cash Flows for the year ended 31 March 2018

The transition from Indian GAAP to Ind AS had no material impact on cash flows generated by the Company.

Footnote to the transition to Ind AS for assets and liabilities

1. Reclassification: The assets and liabilities as of April 1, 2017 have been re-grouped / re-classified, wherever necessary to comply with accounting policies of the Company under Ind AS.

2. FVTOCI Financial Assets: Under Indian GAAP, long term investments in non group quoted equity shares were accounted as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, such investments have been designated as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value. The difference between the instrumentâs fair value and Indian GAAP carrying amount has been recognised as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes as at April 1, 2017 / March 31, 2018.

3. FVTPL Short-term investments: Under Ind AS, investments in mutual funds are valued at fair value and such fair value differences as on the date of transition and for the comparative periods are recognised in the statement of Profit and Loss Account (FVTPL).

Under Indian GAAP, the Company reports the value of such investments at cost or Net Realisable Value whichever was lesser.

Note 5 - Significant accounting judgements, estimates and assumptions

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

In the process of applying the Companyâs accounting policies, management has made the following judgement / estimate, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Fair value of financial instruments

Note 6 - Standard issues but not yet effective

There is no significant impact to the Company on account of the various standards / amendments to the standards that have been issued but not yet effective owing to the nature of business and operations. The amendments are effective ponly from 1 April 2019.

Note 7 - Disclosure in respect of Related Parties a) List of Related Parties

I. Subsidiary Companies

a. Cholamandalam Investment and Finance Company Limited (CIFCL)* and its Subsidiaries

i. Cholamandalam Home Finance Limited (formerly known as Cholamandalam Distribution Services Limited)

ii. Cholamandalam Securities Limited

iii. White Data Systems India Private Limited (Subsidiary upto September, 2018 and Associate thereafter)

b. Cholamandalam MS General Insurance Company Limited

c. Cholamandalam Health Insurance Limited

II. Entity having Significant influence a. Ambadi Investments Limited

III. Subsidiaries of Entity having significant influence

a. Parry Enterprises Limited

b. Parry Agro Limited

IV. Joint Venture

a. Cholamandalam MS Risk Services Limited

V. Key Management Personnel (Pursuant to Companies Act, 2013)

Mr. N Ganesh - Manager & Chief Financial Officer Ms. E Krithika - Company Secretary

VI. Non-Executive Directors

a. Mr. M M Murugappan

b. Ms. Shubhalakshmi Panse

c. Mr. Ashok Kumar Barat (w.e.f August 1, 2018)

d. Mr. B Ramaratnam (w.e.f March 18, 2019)

e. Mr. V Ravichandran (w.e.f March 18, 2019)

f. Mr. Sridharan Rangarajan (w.e.f August 30, 2018)

g. Mr. M B N Rao (till July 31, 2018)

h. Mr. N Srinivasan (till July 31, 2018)

* The Company holds 46.39% of the total shareholding in CIFCL as at March 31, 2019 (46.22% as at March 31, 2018) and has de-facto control as per the principles of Ind AS 110 and accordingly CIFCL has been referred to as a subsidiary in Ind AS Financial Statements.

Note 8 - Contingent Liabilities

Pending litigations, in so far as they relate to the Manufacturing Business Undertaking, shall be borne by the Resulting Company as per the Scheme of Arrangement Consequently, there are no contingent liabilities to be reported.

Note 9 - Deferred tax arising out of fair valuation of equity instruments is recognised in Other Comprehensive Income.

Note 10 - Reconciliation of Tax Expense and the Accounting Profit multiplied by Corporate Income Tax Rate applicable for March 31, 2019 and March 31, 2018:

Note 11 - Stock Options

The Stock Options were granted to the employees of the Manufacturing Business Undertaking as referred to in Note 1 and the related details of movement in Stock Options are given below:

The Fair Value of Options used to compute proforma net profit and earnings per Equity Share have been estimated on the date of the grants using Black-Scholes model by an independent consultant. The related compensation costs, if any, is being accounted for by the Resulting Company.

Note 12 - Financial Risk Management

This note explains the sources of risk which the Company is exposed to and how the entity manages the risk.

The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as, credit risk, liquidity risk and investment of available funds.

a. Credit risk

The Company being an investment company, credit risk refers to the risk that a counter party may default on its contractual obligations leading to a financial loss to the Company. Credit risk primarily arises from cash and cash equivalents, financial assets measured at amortised cost and financial assets measured at fair value through profit or loss.

b. Liquidity Risk

The Companyâs principal sources of liquidity are âcash and cash equivalentsâ and cash flows that are generated from operations. The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. The Company has no borrowings. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar nature thereby ensuring safety of capital and availability of liquidity as and when required. Hence, the Company carries a negligible liquidity risk.

c. Interest rate risk

Interest rate risk is the fair value of future cash flows of a financial instrument which fluctuates because of changes in the market interest rates.

d. Price risk

The Companyâs exposure to equity securities risk arises from investments held by the Company and classified in the balance sheet as fair value through OCI (see note 2).

To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio across sectors, which is as per the investment policy of the Company.

Majority of the Companyâs investment are publicly traded and are included in the NSE Nifty 100 index.

As regards investments in unlisted privately held companies, the fair valuations are largely dependent on the investee companyâs ability to achieve desired outcomes which measure the performance of the company and bear out the valuation of its ownership interests. Hence, these are also exposed to market / operational risks of the investee companies.

Capital Management

Objectives, policies and processes of capital management

The Company is cash surplus and has only equity capital. The Company operates as an Investment Company and is an Non-Banking Financial Institution - Core Investment Company.

The cash surpluses are currently invested in income generating debt instruments (including through mutual funds), money market instruments and bank deposits depending on economic conditions. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds. The Company does not have any borrowings.

Note 13 - Segment reporting

The Companyâs main business is to invest in securities of Group Companies for strategic purposes. All other activities of the Company revolve around the main business. Further, the Company does not have any separate geographic segments other than India. As such there are no separate reportable segments.

Mar 31, 2018

1. Corporate Information

TI Financial Holdings Limited (âthe Companyâ) was formerly known as Tube Investments of India Limited and is a Public Limited Company domiciled in India. The Company is listed on Bombay Stock Exchange and National Stock Exchange. The Registered Office of the Company is located at 234, NSC Bose Road, Chennai, Tamil Nadu.

The Company was originally incorporated as âT.I. Cycles of India Limitedâ on 9^th September 1949 under the Companies Act, 1913. On 15^th September 1959, the name was changed to âTube Investments of India Limitedâ.

Pursuant to the Scheme of Arrangement (âthe Schemeâ) the details relating to which are more elaborately provided under Note 1.1 below, the name of the Company has been changed from âTube Investments of India Limitedâ to âTI Financial Holdings Limitedâ (CIN: L65100TN1949PLC002905).

The Company is engaged in Financial Services Businesses through its Subsidiaries, Joint Venture and Associate Company viz., Insurance Business (through its Subsidiary - Cholamandalam MS General Insurance Company Limited for its General Insurance business, and has incorporated Cholamandalam Health Insurance Limited (âCHILâ) for the purpose of undertaking Health Insurance business on receipt of regulatory approvals), Risk Services (through its Joint Venture Company, Cholamandalam MS Risk Services Limited), Non-Banking Financial Business (through its Associate Company, Cholamandalam Investment and Finance Company Limited).

1.1 Scheme of Arrangement

The Scheme of Arrangement (âthe Schemeâ) between the Company (âDemerged Companyâ) and Tube Investments of India Limited, formerly known as TI Financial Holdings Limited (âResulting Companyâ), their Share holders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, was approved by the Board of Directors of both the Companies on November 03, 2016 and National Company Law Tribunal, Chennai (âNCLTâ) vide its order dated 17^th July 2017 sanctioning the Scheme (âOrder of NCLTâ). The Scheme was given effect by filing of a certified copy of the Order of NCLT on August 1, 2017 by the Company and the Resulting Company with the Registrar of Companies, Tamil Nadu, Chennai. The Scheme is effective from the Appointed Date i.e. April 1, 2016.

The salient features of the Scheme of Arrangement are as under:

a) The Company and Resulting Company has made applications and / or petitions under Section 230 read with Section 232 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 to the National Company Law Tribunal, Chennai (âTribunalâ or âNCLTâ) for sanction of this Scheme and all matters ancillary or incidental thereto.

b) The whole of the undertaking and assets and properties of the Manufacturing Business Undertaking of the Company, shall stand transferred to and vested in the Resulting Company with all the rights, title and interest pertaining to the Manufacturing Business Undertaking.

c) The Scheme of Arrangement has become effective from the Appointed Date i.e. April 1, 2016 but operative from the Effective Date i.e. August 1, 2017 being the date of filing of a certified copy of the Order of NCLT by the Company and the Resulting Company with the Registrar of Companies, Tamil Nadu, Chennai.

2. Basis of Preparation

The Company is a Core Investment Company (CIC) as per the regulations prescribed by the Reserve Bank of India. These financial statements have been prepared on the basis of Generally Accepted Accounting Principles in India (âIndian GAAPâ) and by applying the historical cost convention on an accrual basis, to comply in all material respects with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016.

3. Share Capital

a) The Reconciliation of share capital at the beginning and at the end of reporting period is given below:

b) Terms / Rights attached to class of shares

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.1/- each (Previous year Rs.1/- each). The holders of Equity Shares are entitled to one vote per share. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital will be in proportion to the number of Equity Shares held.

c) Details of Shareholder(s) holding more than 5% of Equity Shares in the Company as on March 31, 2018

Pursuant to the Scheme of Amalgamation of Murugpppa Holdings Limited and Pressmet Private Limited with Ambadi Investments Private Limited, Murugappa Holdings Limited and Pressmet Private Limited has been merged with Ambadi Investments Limited. Subsequent to this amalgamation, Ambadi Investments Private Limited has become a Public Limited Company.

d) Status on Global Depository Receipts (GDR)

The aggregate number of GDRs outstanding as at March 31, 2018 is 42,30,630 (as at March 31, 2017 - 42,30,630) each representing one Equity Share of Rs.1/- face value (Previous Year Rs.1/- face value). GDR % against total number of shares is 2.26% (as at March 31, 2017 - 2.26%). The GDRs carry the same terms / rights attached to Equity Shares of the Company.

a) As per Section 45 IC of the Reserve Bank of India Act, 1934, the Company is required to create a minimum Reserve fund at the rate of 20% of the profit after tax. Accordingly, the Company has transferred an amount of Rs.11.90 Cr. (March 31, 2017 Rs.7.30 Cr.) out of the profit after tax for the year ended March 31, 2018 as Reserve Fund.

b) The Board of Directors of the Company have recommended a final dividend of 65% being Rs. 0.65 per share on the equity shares of the Company, for the year ended March 31, 2018 (Nil - March 31, 2017) which is subject to approval of shareholders. Consequently, the proposed dividend has not been recorded in the books in accordance with AS-4 (Revised).

4. Disclosure in respect of Related Parties

a) List of Related Parties

I. Subsidiary Companies

a. Cholamandalam MS General Insurance Company Limited

b. Cholamandalam Health Insurance Limited

II. Company having Significant Influence

Ambadi Investments Limited (formerly known as Murugappa Holdings Limited) (Also Refer Note 4 (c))

III. Associate Companies

Cholamandalam Investment and Finance Company Limited and its Subsidiaries namely;

a. Cholamandalam Distribution Services Limited

b. Cholamandalam Securities Limited

c. White Data Systems India Private Limited

IV. Joint Venture Companies

a. Cholamandalam MS Risk Services Limited

V. Key Management Personnel (KMP) (Pursuant to Companies Act, 2013)

Mr. N. Ganesh - Manager (from August 9, 2017 & Chief Financial Officer (from February 5, 2018) Mr. AN. Meyyappan - Chief Financial Officer (from August 9, 2017 till February 5, 2018)

Ms. E. Krithika - Company Secretary (from August 9, 2017)

5. Contingent Liabilities

Pursuant to the scheme of arrangement (âthe schemeâ) the manufacturing business undertaking of the Company was vested in / transferred to Tube Investments of India Limited (âformerly known as TI Financial Holdings Limitedâ, âResulting Companyâ) vide the order of the National Company Law Tribunal, Chennai (âNCLTâ) dated July 17, 2017 sanctioning the scheme. The scheme has an appointed date of April 1, 2016 and has come into effect from August 1, 2017.

Pursuant to the scheme becoming effective, all taxes, duties, cess payable by the Company related to the Manufacturing business undertaking including all advance tax payments, tax deducted at source or any refunds / credits / claims relating thereto shall for all purposes, be treated as advance tax payments, tax deducted at source or refunds / credits / claims, as the case may be, of the Resulting Company, provided however that any direct or indirect taxes that cannot specifically be earmarked as the liability of refunds / credit / claims relating to the Manufacturing business undertaking shall continue to be borne by the Company. The scheme further provides that if the Company or their successor(s) receives any refunds / credits / claims or incurs any liability in respect of the Manufacturing Business Undertaking, the same shall be on behalf of and as a trustee of the Resulting Company and the same shall be refunded to / paid by the Resulting Company.

Had compensation cost for the Stock Options granted under the Scheme been determined based on fair value method, the Companyâs profit and earnings per share would have been as per the pro forma amounts indicated below:

6. Information on Joint Venture Entity

The Company holds 49.50% interest in Cholamandalam MS Risk Services Limited, a Joint Venture Entity, located in India. The Companyâs share of the assets, liabilities, income and expenses of the jointly controlled entity for the year ended March 31, 2018 are as follows:

7. Previous Yearâs Figures

The Company has reclassified/regrouped previous year figures to conform to this yearâs classification.

Mar 31, 2017

1. Employee Benefits

(a) Gratuity

Under the Gratuity plan operated by the Company, every employee who has completed atleast five years of service gets a Gratuity on departure at 15 days on last drawn salary for each completed year of service as per Gratuity Act, 1972. The scheme is funded with an Insurance Company in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet.

i. The entire Plan Assets are managed by Life Insurance Corporation of India (LIC). In the absence of the relevant information from the LIC / Actuary, the above details do not include the composition of plan assets.

ii. The expected / actual return on Plan Assets is as furnished by LIC.

iii. The estimate of future salary increase takes into account inflation, likely increments, promotions and other relevant factors.

(b) Provident Fund

The Company''s Provident Fund is exempted under Section 17 of the Employees'' Provident Fund Act, 1952. Conditions for the grant of exemption stipulate that the employer shall make good the deficiency, if any, in the interest rate declared by the Trust over the statutory limit. The Actuary has provided a valuation for Provident Fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions provided below, the Company does not have additional obligation. Pursuant to the Scheme of Arrangement (Refer Note 44), all the employees have been transferred to the Resulting Company and the related provident fund balances have been transferred to the Resulting Company.

d) Contributions to Defined Contribution Plans

During the year, the Company recognized Nil (Previous Year ''9.97 Cr.) for Contributions to Provident Fund, Nil (Previous Year ''5.06 Cr.) for Contributions to Superannuation Fund and Nil (Previous Year ''0.96 Cr.) for Contributions to Employee State Insurance Scheme in the Statement of Profit and Loss.

2.. Segment Information

Pursuant to the Scheme of Arrangement (Refer Note 44), the 3 primary segments of Previous Year- Cycles and Accessories, Engineering and Metal Formed Products, have been transferred to the Resulting Company.

In the Current Year, the Company is engaged in a single business segment i.e., investment and operated only in one geographical segment. Accordingly, there are no separate reportable segments as per the Accounting Standard 17 on Segmental reporting.

3.. Disclosure in respect of Related Parties pursuant to Accounting Standard 18

(a) List of Related Parties

I. Subsidiary Companies

a. Cholamandalam MS General Insurance Company Limited

b. Shanthi Gears Limited *

c. Financiere C10 SAS and its Subsidiaries namely: *

i. Sedis SAS

ii. Societe De Commercialisation De Composants Industriels - SARL (S2CI) (merged with Sedis SAS)

iii. Sedis Co. Ltd.

iv. Sedis Gmbh

d. TI Tsubamex Private Limited *

II. Company having Significant Influence

a. Murugappa Holdings Limited

III. Associate Company

Cholamandalam Investment and Finance Company Limited and its Subsidiaries namely

a. Cholamandalam Distribution Services Limited

b. Cholamandalam Securities Limited

c. White Data Systems India Private Limited

IV. Joint Venture Companies

a. Cholamandalam MS Risk Services Limited

b. TI Absolute Concepts Private Limited *

V. Key Management Personnel

Mr. L Ramkumar - Managing Director

Mr. K Mahendrakumar - Chief Financial Officer from 15^th December 2016