Get App Open
In App
Open App
you are here:

Cholamandalam Investment and Finance Company Ltd.

BSE: 511243 | NSE: CHOLAFIN |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE121A01024 | SECTOR: Finance - NBFC

BSE Live

Dec 06, 16:01
731.50 -6.05 (-0.82%)
  • Prev. Close


  • Open Price


  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Dec 06, 15:54
734.80 -2.90 (-0.39%)
  • Prev. Close


  • Open Price


  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    734.80 (1282)

Annual Report

For Year :
2021 2019 2017 2016 2015 2014 2013 2012 2011

Director’s Report


Your directors have pleasure in presenting the forty third annual report together with the audited accounts of the company for the year ended 31 March, 2021.


'' in crores




Gross Income



Profit Before Tax (PBT)



Profit After Tax (PAT)



One-time provision for COVID and Macro



Profit Before Tax before one-time provisions



Profit after Tax before one-time provisions



Total Comprehensive income




Transfer to statutory and other reserves



Dividend - Equity (including Taxes)




During the year, there was an increase in paid up capital by ? 0.09 crores, consequent to allotment of shares upon exercise of stock options by employees under the company''s employee stock option schemes.


The year began with the COVID-19 pandemic and nation-wide lock down resulting in halting most of the economic activities across the country and the globe. Central Banks across the globe including RBI came into action for supporting the economy. Moratoriums were offered to borrowers for a period of 6 months to support them to overcome the impact of COVID and related lock down. Emergency Credit Guarantee Schemes and one-time restructuring of loans were other initiatives by RBI to support the borrowers in COVID-19 related stress. Further reduction in repo rates, Cash Reserve Ratio (CRR) and Long Term Repo Operation (LRTO) action with Banks supported in abundant liquidity in the financial system.

Inspite of the slowdown in the automotive sector and imposition of lockdown from March, 2020 to July, 2020 across majority of states, which had a significant impact on the economy, your company surged back and achieved a growth of 16% in assets under

management (AUM) for FY 21. The profit before tax (PBT) registered a growth of 29% as compared to FY 20 after considering the onetime provision of ? 565.78 crores.

Vehicle Finance (VF) business witnessed a disbursement decline of 13%. Disbursements in VF for the year were at ? 20,249.11 crores as against ? 23,387.43 crores in the previous year. The business recorded a growth of 14% in closing managed assets and PBT registered a growth by 36% after considering additional provision of ? 449 crores towards its share of one-time provision.

Loan Against Property (LAP) business also witnessed a disbursement decline of 1%. Disbursements in LAP for the year were at ? 3,626.80 crores as against ? 3,661.89 crores in the previous year. The business recorded a growth of 14% in closing managed assets and PBT showed a growth of 25% after considering its share of one-time provision of ? 89.71 crores.

Disbursements in Home Loans (HL) business were at ? 1,542.28 crores as against ? 1,504.74 crores in the previous year and Micro, Small and Medium Enterprise (MSME) business were at ? 624.44 crores as against ? 537.11 crores in the previous year.

The business AUM of the company as at 31 March, 2021 increased to ? 69,996 crores from ? 60,549 crores in the previous year, recording a growth of 16%.

In accordance with the Reserve Bank of India (RBI) guidelines related to COVID-19 regulatory package, your company had offered moratorium to its customers based on their eligibility for EMIs falling due between 1 March, 2020 to 31 August, 2020. Further, your company had offered resolution plans to its customers pursuant to RBI''s guideline on ''Resolution framework for COVID-19 related stress''.

Your company holds a management overlay of ? 1,100 crores as at 31 March, 2021 which includes an additional one-time provision created for COVID-19 in FY 21 for ? 566 crores and also retaining additional provision as on 31 March, 2020 ? 534 crores.

As required by the RBI notification dated 13 March, 2020, your company has complied with the requirements of Ind AS and the guidelines and policies approved by the board in recognition of impairment. The overall impairment provision made under Ind AS is higher than the prudential floor (including the provision requirement specified in the above notification) prescribed by RBI.

Given the dynamic and evolving nature of pandemic these estimates include the possible impact of known events till date are subject to uncertainty caused by resurgence of COVID-19 pandemic and related events.

During the year, your company had not availed moratorium on its borrowings. Your company had a closing balance of cash and bank balances including term deposits and investments in Government securities ? 6,428 crores, sanctioned lines of ? 2,000 crores and undrawn consortium limits of ? 1,351 crores as on 31 March, 2021, ensuring no negative cumulative mismatches across all time buckets. Pursuant to RBI notification on monitoring liquidity position of company, Liquidity Coverage Ratio (LCR) must be maintained at 50% and your company has been tracking this ratio for the past few months and ensured that the coverage is amply fulfilled.


Outlook for FY 22 continues to remain uncertain, with onset of second wave of COVID-19. Apart from agriculture and related activities, most other sectors of the economy have been adversely impacted by the pandemic and are expected to show de-growth.

VF business will continue to be the mainstay for the company. LAP portfolio has also been a significant contributor to the company''s growth and profitability. HL is the rising star and has a great potential to be built into a solid portfolio considering the expertise of the company in handling typical customer profiles. The company has also collaborated and upgraded in strengthening its digital applications with an aim to reduce physical touchpoint with stakeholders especially in this pandemic situation. The company''s robust collection mechanism aided with a strong credit risk assessment framework will help us steer through the strong currents of the COVID-19 pandemic in FY 22.


Dividend distribution policy

The company has formulated a dividend distribution policy in compliance with regulation 43A of SEBI (Listing Obligation and

Disclosure Requirement) Regulations, 2015 (Listing Regulations), copy of which is available on the website of the company. (weblink:

Payment of dividend

Your 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

29 January, 2021 for the year ended 31 March, 2021.

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, the total dividend will be 100% (? 2.00 per equity share) for the year ended 31 March, 2021.


The company transferred a sum of ? 310 crores to statutory reserve as required under the Reserve Bank of India Act, 1934 and ? 750 crores to general reserves.


The company is an NBFC - Investment and Credit Company (NBFC-ICC). The company does not hold or accept deposits as of the date of balance sheet.


The company''s capital adequacy ratio was at 19.1% as on 31 March, 2021 as against the statutory minimum capital adequacy of 15% prescribed by RBI.


ESOP 2016

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 a grant aggregating to 2,13,805 options to 4 employees. The total number of options issued as on 31 March, 2021 under ESOP 2016 is 35,24,972.

ESOP 2007

Pursuant to the approval accorded by the shareholders at the twenty ninth annual general meeting (AGM) of the company held on

30 July, 2007 the nomination and remuneration committee had formulated an employee stock option scheme 2007 (ESOP 2007). During the year, there have been no fresh grants under the scheme and there have been no changes in the scheme. Number of options outstanding as on 31 March, 2021 under the ESOP 2007 is 18,820.

The schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI (SBEB) Regulations) and the Companies Act, 2013 (the Act).

The certificate from the statutory auditors confirming that ESOP 2007 and ESOP 2016 have been implemented in accordance with the SEBI (SBEB) Regulations and shareholders resolutions has been obtained and will be available for the shareholders at the ensuing AGM.

The details of the schemes as on 31 March, 2021 are provided and disclosed on the website of the company (weblink: https://www.cholamandalam/esop.aspx).



Mr. Vellayan Subbiah was appointed as an additional director with effect from 11 November, 2020 by the board and elected as chairman of the board effective 12 November, 2020.

Further, Mr. M.A.M. Arunachalam was appointed as an additional director of the company effective 29 January, 2021.

Mr. Vellayan and Mr. Arunachalam hold office up to the date of ensuing AGM as additional directors. Their appointment as non-executive directors liable to retire by rotation have been recommended for approval of the shareholders at the ensuing AGM of the company.

Mr. Anand Kumar and Mr. Bharath Vasudevan were appointed as additional directors in the capacity of independent directors on 16 March, 2021. They hold office up to the date of ensuing AGM as additional directors. The appointments of Mr. Kumar and Mr. Vasudevan as independent directors up to 5 years from the date of their appointments have been recommended for approval of the shareholders at the ensuing AGM of the company.

Mr. Ravindra Kumar Kundu, Director who retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.


Mr. M.M. Murugappan, chairman and non-executive director of the company resigned as a director and chairman of the board with effect from the close of business hours of 11 November, 2020.

Mr. Arun Alagappan, managing director stepped down from board of the company with effect from end of day 14 February, 2021.

The board places on record its deep appreciation for the guidance and significant contribution made by Mr. Murugappan and Mr. Arun Alagappan towards the success of the company during their tenure.


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 the integrity, expertise and experience and confirm that they are independent of the management. All the IDs of the company have registered their names with the data bank of IDs and are in the process of completion of 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 during FY 21:

1. Mr. Arun Alagappan, Managing Director (upto 14 February, 2021)

2. Mr. Ravindra Kumar Kundu, Executive Director

3. Mr. D. Arul Selvan, Chief Financial Officer and

4. 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 Listing Regulations is attached and forms part of this report. The report also contains the details as required to be provided on the composition and category of directors, number of meetings of the board, composition of the various committees, annual board evaluation, remuneration policy, criteria for board nomination and senior management appointment, whistle blower policy/vigil mechanism, disclosure of relationships between directors inter-se, state of company''s affairs, etc.

The executive director and the chief financial officer have submitted a compliance certificate to the board regarding the financial statements and other matters as required under regulation 17(8) of the Listing Regulations.


A business responsibility report is attached and forms part of this report.


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


M/s. S. R. Batliboi & Associates LLP, chartered accountants are the statutory auditors of the company. They were appointed as statutory auditors of the company at the 39th AGM held on 27 July, 2017 for a period of five years commencing from the conclusion of 39th AGM till the conclusion of 44th AGM. The statutory audit report is attached with financial statement and forms part of this report and does not contain any qualification, reservation or adverse remarks.

RBI has issued guidelines on 27 April, 2021 for appointment of statutory auditors for Banks and NBFCs applicable from second half of FY 22 which inter alia mandates appointment of joint auditors and tenure of the auditors shall be for 3 continuous years. The company will be taking necessary steps to comply with the new RBI guidelines.


Pursuant to the provisions of the Act and the rules framed there under, M/s. R. Sridharan & Associates, company secretaries had undertaken a secretarial audit of the company for FY 21. The secretarial audit report is attached and forms part of this report and does not contain any qualification, reservation, or adverse remarks.


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: Annual-Return-2020-2021.pdf.


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 now even before it was mandated under the Act. The company has put in place a CSR policy. The policy along with composition of CSR committee and projects approved by the board are available on the website of the company (weblink: httDs://

As per the provisions of the Act, the company is required to spend at least 2% of the average net profits of the company made during the three immediately preceding financial years. This amount aggregated to ? 32.07 crores and the company spent the entire ? 32.07 crores towards CSR activities during FY 21, the details of which are annexed to and forms part of this report.


Internal control framework including clear delegation of authority and standard operating procedures are established and laid out across all businesses and functions. These are 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_(weblink:

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 made by the company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the company at large. There were no contracts or arrangements entered into with related parties during the year to be disclosed under sections 188(1) and 134(h) of the Act in form AOC-2. All transactions with related parties were placed before the audit committee for prior approval at the beginning of the financial year. The transactions entered into pursuant to the approval so granted were placed before the audit committee for its review on a quarterly basis. None of the directors has any pecuniary relationship or transaction vis-a-vis the company.


During the year under review, the company has no major impact on account of conservation of energy or technology absorption. Foreign currency expenditure / remittances amounting to ? 143.57 crores was incurred during the year under review. Foreign currency remittances made during the year was ? 2.65 crores towards purchase of computer equipment. 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.

As regards investments made by the company, the details of the same are provided under note 10 in standalone financial statements and notes 12 and 45 in consolidated financial statements of the company for the year ended 31 March, 2021.


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


In accordance with section 136 of the Act, the report and accounts 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. 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 are covered under this policy. During the year, the company conducted workshops for employees creating awareness about POSH Act. During the calendar year ended 31 December, 2020, there were no referrals received by ICC.


There was no fraud reported by auditors of the company as given under Section 143(12) of the Companies Act, 2013 (Read with Companies (Audit and Auditors) Rules, 2014.

During the year ended 31 March, 2021, the company had made one application amounting to ? 1.28 crores under the Insolvency and Bankruptcy Code, 2016 (the Code). As at 31 March, 2021, total number of applications filed and pending under the Code are 12 amounting to ? 31.86 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 the year, CSEC focused on creating three distinct business lines for enhancing revenues and productivity - broking, wealth, and insurance distribution. The broking business grew, wealth business dropped by due to cap on upfront income and insurance distribution business was scaled up significantly. CSEC achieved a gross income of ? 30.14 crores for the year ended 31 March, 2021 and made a PBT of ? 6.84 crores as against a PBT of ? 3.27 crores in the previous year. The Mutual Fund AUM was at ? 967 crores. CSEC did not declare any dividend during the year. The PBT contribution of CSEC to the overall performance of the company was ? 6.84 crores during the year.


CHFL recorded a gross income of ? 37.15 crores for the year ended 31 March, 2021 and made a profit before tax of ? 2.62 crores as against a loss of ? 0.77 crores in the previous year. CHFL did not declare any dividend during the year. Currently, the company continues its focus on growing insurance corporate agency business.

The PBT contribution of CHFL to the overall performance of the company was ? 2.62 crores during the year.


WDSI recorded a gross income of ? 5.77 crores for the year ended 31 March, 2021 and made a loss of ? 2.30 crores as against a loss of ? 1.35 crores in the previous year. WDSI did not declare any dividend during the year.


During the year, the Company joined a consortium for retail payments - Vishvakarma Payments Private Limited (VPPL) that applied for a New Umbrella Entity (NUE) License for retail payments with Reserve Bank of India. VPPL is a Company incorporated in India under the Act. FSS, Zoho, Zerodha, RazorPay, Ujjivan and Airpay are also part of the VPPL consortium along with the company. The company holds 21% of equity share capital of VPPL. The application for NUE license is pending before RBI.


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

On behalf of the board

Place : Chennai Vellayan Subbiah

Date : 7 May, 2021 Chairman

Director’s Report