Cholamandalam Financial : Transcript of the proceedings of 74th Annual General Meeting held on August 10, 2023

Cholamandalam Financial Holdings Limited

Registered Office: "Dare House", No. 234, N S C Bose Road, Chennai - 600 001.

Phone: [phone]; Fax: [phone];

CIN: L65100TN1949PLC002905

E-mail:[e-mail]; Website:www.cholafhl.com

Transcript of the proceedings of the 74th Annual General Meeting of the Company held at

3.30 pm on Thursday, August 10, 2023 through Video ConferencingWelcome Address by Mr. M M Murugappan, Non-Executive Chairman

Mr. MM Murugappan: Good evening.

It gives me great pleasure to welcome you all to the 74th Annual General Meeting (AGM) of Cholamandalam Financial Holdings Limited. I hope you and all your family members are safe and in good health. The MCA and the SEBI have allowed companies to conduct Annual General Meetings through Video Conferencing or Other Audio Visual Means. Accordingly, the 74th AGM of the Company is being held in an electronic mode through Video Conference. The Company has made necessary arrangements for participation of shareholders in the meeting through Video Conference and vote at the AGM in a seamless manner.

The requisite quorum for the meeting being present, I now call the meeting to order. In accordance with the relaxation provided by the MCA and SEBI, the notice convening the 74th AGM of the Company and the annual report for the financial year ended 22-23 have been sent through electronic mode to all those shareholders whose e-mail addresses are registered with the Registrar and transfer agent in case of physical holding or depository participants, in case of demat holdings. Further, as per SEBI mandate, a physical copy of the Annual Report has been sent to those shareholders who have requested the same. The AGM Notice and the Annual Report are also available on the websites of the company and the stock exchanges.

The company has also issued an advertisement informing the shareholders to register their e-mail addresses to enable the company to send these documents electronically to them. As mentioned in the notice, since the meeting is being held electronically, the facility for appointment of proxies by the members is not available at this AGM.

Ladies and gentlemen, let me now introduce my colleagues on the board who are present here with me at the registered office of the company. We have Mr. B Ramaratnam, our Independent Director. He is the Chairman of the Audit Committee and a member of the Stakeholders Relationship Committee and the Risk Management Committee. Mrs. Vasudha Sundararaman, an independent director. She is the Chairperson of the Nomination and Remuneration Committee and a member of the Audit Committee. Mr. Sridharan Rangarajan, the Non-Executive Director is a member of the Audit Committee, Stakeholders Relationship Committee and the Risk Management Committee. I would also like to introduce to you Mr. K Balasubramanian who is an independent director. He is attending the meeting virtually from Toronto, Canada. Mr. Balasubramanian is a member of the Audit Committee and the Nomination and Remuneration Committee of the Board. Mr. Vellayan Subbiah, Non Executive Director, is unable to attend the meeting. May I also introduce to you my colleagues in the company, Key managerial personnel, Mr. N Ganesh who is the Manager and Chief Financial Officer, Ms. E Krithika, Company Secretary. We also have Mr. S Venugopalan, CFO of our subsidiary company Cholamandalam MS General Insurance. He is here with us too. Mr. Tirtharaj Khot, Mr. Mandar Ghanekar, Mr. Santhana Raman from Messrs. Sharp and Tannan Associates, Chartered Accountants, our

statutory auditors and Mrs. Srinidhi Sridharan, our Secretarial auditor and Mr. R Sridharan, scrutinizer for the purpose of remote e-voting and voting process at the AGM have also joined the meeting through video conference.

The AGM Notice and the annual report for the financial year 22-23 have all been circulated to shareholders. With your permission, I will take the notice convening the meeting as read. The Register of Directors, key managerial personnel and their shareholding, and the register of contracts or arrangements in which the Directors are interested, and other documents mentioned in the notice are available for inspection by members.

Members seeking to inspect these documents may contact the Company secretary in this regard. The Statutory Auditors report on the financial statements of the Company for the year ended 31st March 2023, does not have any qualifications, observations or other remarks on financial transactions or matters having any adverse effect on the functioning of the company. The Secretarial auditors report for the year ended March 31st, 2023 also does not contain any qualifications, observations or other adverse remarks. Accordingly, the statutory auditors report and the secretarial auditors report are not required to be read at this meeting.

Ladies and gentlemen, let me now briefly take you through the company's performance during the year 2022-23.

Chairman's Speech

Amidst volatile and complex global scenario characterized by geopolitical tensions, supply chain disruptions, inflationary pressures, the Indian economy was on a better footing backed by strong macro fundamentals and prudent measures taken by the government and regulatory bodies, the economy is advancing well and most estimates indicate the GDP growth for financial year 23 to be around the 7% range.

In this context, it gives me great pleasure to share with you your company's performance highlights for the year ended March 31st, 2023. As you are aware from the financial results, your company continued to perform well during the fiscal year 2023. Cholamandalam Financial Holdings ended the year with a consolidated total income of ₹18,376 crores as against ₹14,735 crores in the previous year at 25% growth and a consolidated profit before tax of ₹3824 crores compared to ₹3044 crores in the previous year, a 26% growth year on year. The performance during the year reflects the strong execution by the teams across each of our company's businesses and functions. I'm glad to inform you that your company's board has recommended a final dividend of 55% for this financial year for shareholders' approval.

Amongst the financial services sector, the NBFC landscape in which our company operates continues to evolve rapidly adapting to regulatory changes and market volatility. While NBFC's are better positioned today, rising interest rates and competition from banks in traditional segments pose challenges for the sector at large. Having said that, Cholamandalam Investment and Finance Company delivered a stellar performance in terms of disbursements, collections and profitability in the year 2023.

CIFCL's assets under management crossed 1 Lakh crores during the year. Leveraging the industry growth, the company has improved its market share across its product segments. CIFCL registered an overall disbursement of ₹66,532 crores and 87% growth year on year and a profit before tax of ₹3600 crores at 25% growth year on year during the year 22-23. The company's robust liquidity management framework has ensured enough liquidity was available throughout

the year. CIFCL also successfully implemented a host of initiatives across employee productivity, branch expansion, IT enablement, customer engagement, etc. to drive growth and enhance customer experience.

Coming to Cholamandalam MS General Insurance, the Indian insurance industry is undergoing a rapid shift in terms of regulations, customer expectations, accelerated digitization. All of this augurs well for the growth of the industry and for enhancing operating efficiencies.

The general insurance industry excluding standalone health insurance players grew by 16.2% largely in motor health and fire lines of business. Our insurance subsidiary, Cholamandalam MS General Insurance recorded a gross written premium of ₹6407 crores helping to grow its market share to 2.87% amongst multi line players. The company grew across all its major distribution verticals and renewed its bancassurance agreements with public sector banks. Chola MS continues to add new channel partners, progress its strategic intent of de-risking and diversification, increased its efforts on digitization and operates on the sound financial stability as is reflected in a solvency level of 2.01 times as at March 31st, 2023.

Our joint venture Cholamandalam MS Risk Services, a company offering risk management solutions strengthened its order book by bagging new contracts aggregating to 70 crores during the year. Chola Risk expanded its service offerings by launching a number of strategic projects in the area of Behavioural Science Based Safety and an Alliance Water Stewardship. The company looks forward to expanding its existing customer base through a targeted marketing and branding strategy in the domestic market.

Your company stays committed to its philosophy of giving back to society. The CSR activities carried out through our group entities in the areas of health, education, environmental sustainability, sports and conservation of arts and culture facilitate impactful initiatives driving the group's sustainability agenda through a collaborative approach with its implementing partners.

Though challenging external conditions prevail, we look forward to a positive trajectory to continue in this current fiscal too. Our keen focus on our strategic priorities will enable us to deliver seamless and consistent growth. Your company is poised to strengthen its capabilities and digital solutions to tap the growth potential ahead. While we are confident to accomplish sustained performance across all our business portfolios, ensuring customer satisfaction is our top priority.

The Board plays a vital role in shaping and embedding the right corporate culture to progress. Our Board members have always been a great source of support. I would like to thank each and every one of our members of the Board for their committed involvement and to their great contribution.

I take this opportunity to thank all our stakeholders, our shareholders, customers, regulators, business partners, vendors for their continued support. My appreciation and best wishes to our leadership teams and the entire teams in all our companies, their commitment and unstinted effort. I also wish to acknowledge their dedication and valuable contribution towards driving the company to greater success.

I come to the first quarter results of FY24.

I'm pleased to share that the first quarter results of Cholamandalam Financial Holdings for the current fiscal year 23-24 was approved by the Board at its meeting held this morning. The company's consolidated total income for the quarter was at ₹5715 crores as against ₹3963 crores

in the correspondent quarter of the previous year, registering a growth of 44%. The consolidated profits after tax were at ₹792 crores for the quarter ended June 30th, 2023 as against ₹582 crores in the correspondent quarter of the previous year, registering a growth of 36%. The standalone income for the quarter ended June 30th, 2023 was ₹2.58 crores against ₹2.10 crores in the corresponding quarter of the previous year. And the profits after tax for the quarter ended June 30th, 2023 was at ₹0.77 crores against a loss of ₹0.26 crores in the quarter in the previous year.

Moving on to the first quarter results of subsidiaries and associate companies, the NBFC retail industry, AUM growth is expected to be about 18 to 20% in the year 23-24 secured NBFC retail loans consisting of vehicle finance and other secured business loans is forecasted to grow about 14 to 16%. CIFCL's growth momentum continues in Q1 in this fiscal year 23-24 across its diversified business segments. Aggregate disbursements grew by 50% to ₹20,015 crores as against ₹13,329 crores in the same quarter last year.

Assets under management as of 30th June, 2023 stood at ₹1,22,755 crores as compared with ₹86,703 crores last year, registering a 42% growth year on year. Profit before tax was at ₹968 crores for the first quarter as against ₹762 crores for the same period last year. The capital adequacy ratio of CIFCL as that 30th June was at 17.44% against the regulatory minimum of 15%.

Chola MS General Insurance registered a gross written premium of ₹1731 crores during the quarter ended June 30th, 2023 as against ₹1384 crores in the corresponding quarter of the previous year, thus registering a growth of 25%. Profits after tax for the quarter was were at ₹81 crores as against ₹20 crores in the first quarter of the previous year.

Chola MS Risk achieved the total income of ₹15.28 crores for the quarter ended June 30th, 2023 as against a similar income in the corresponding quarter of the previous year. Profits after tax were at ₹0.25 crores as against ₹1.12 crores in the quarter in the previous year. So that gives you a snapshot of the first quarter's performance. I once again thank you all for your patient listening.

We will now take up the resolutions as set forth in the AGM notice. We have 7 resolutions before this Annual General Meeting. For your information, I will read these out in brief.

Item 1 is the adoption of the audited standalone financial statements, together with the Board's report and the auditor's report, thereon for the financial year ended 31st March, 2023.

Item 2 is the adoption of the audited consolidated financial statements together with the auditor's report for the same period.

Item number 3 is declaration of the final dividend.

Item number 4 is the reappointment of Mr. Vellayan Subbiah, who retires by rotation.

Item 5 is the reappointment of Mr. B Ramaratnam, Independent Director, for a second term of three consecutive years, effective March 18th, 2024.

Item 6 is the reappointment of Mr. N Ganesh as the manager of the company for a further period of three years, effective June 15th, 2023 and

Item 7 is the alteration of the articles of Association of the Company.

The company has engaged M/s. KFin Technologies Limited to provide the facility of electronic

voting to all its members to cast their vote on the business contained in the AGM notice. Voting rights are available to members and beneficial owners who hold shares in the company as on the cut-off date August 3rd, 2023. The remote electronic voting window was kept open from Saturday, August 5th, 2023 till Wednesday, August 9th, 2023. Thereafter, the remote e-voting facility was disabled by KFin. Members who have not cast their vote through remote voting may cast their vote through this e-voting facility provided during the meeting session. The e-voting window will be activated, allowing the members to cast their vote. Members are requested to refer to the AGM notice for Instructions on e-voting during the meeting. M/s R Sridharan of M/s. R Sridharan and Associates, practicing Company Secretaries, has been appointed by the Board of Directors as the scrutinizer for conducting the electronic voting process in a transparent manner.

Ladies and gentlemen, the Annual Report for the year ended 31st March, 2023 has been with you for some time now. The company has provided an opportunity to shareholders to post their queries and also to register themselves as speakers if they wish to speak at the meeting. Five members have been registered to speak at the meeting and nobody has posted any queries through the KFin platform.

Moderator Sir, may I now request you to facilitate the registered speakers, in order of their registration, to speak or raise clarifications regarding the accounts and operations of the company during the year 22-23. Request to members to keep their questions and comments brief and specific and not to repeat questions that have already been raised. May I also request the members to confine their questions to the company's operations and the annual accounts and make such comments that are pertinent to the company's performance. And please refrain from making any personal remarks.

In case your queries pertain to the subsidiary's operations, I request members to mention the document they are referring to in order that we can address your queries better. In the interest of time and with a view to give adequate opportunities to all. I request members to be judicious with their time and take up to 3 minutes per member to express your views and put forward your questions that are relevant to the business of the meeting.

We will tabulate all your questions. My colleagues and I will be pleased to answer them thereafter to the extent that they are not prejudicial to the interest of the company. Moderator sir, may I now request you to facilitate the speakers.

Moderator: Thank you Sir. I'm the moderator here. I will bring the pre-registered speakers who are currently available one by one.

The first registered speaker is Mr. Ramesh Shankar Golla from Hyderabad. Mr. Ramesh Shankar Golla is not available at this moment. We will move to the second registered speaker. The second registered speaker is Mr. Mukesh V Ajmera from Bangalore. I would request Mr. Mukesh Ajmera to unmute your audio and switch on your camera to proceed further. Thank you.

Mr. Mukesh V Ajmera: Am I audible?

Moderator: Yes, Sir. You are audible, Sir. Please proceed.

Mr. Mukesh V Ajmera: Chairman Murugu, Krithika and other Board of Directors anaivarukkum vanakkam. I hope all of you are in good health and also your families. At the outside, I would like to congratulate the company in advance for its forthcoming Platinum jubilee next year. I'm wishing the company lots of good luck and further growth and progress along with all its stakeholders.