1. We have audited the accompanying Standalone Financial Statements of Cholamandalam Investment and Finance Company Limited
('the Company'), which comprise the Standalone Balance Sheet as at 31 March 2026, and the Standalone Statement of Profit And Loss
(including Other Comprehensive Income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for
the year ended on that date and notes to the Standalone Financial Statements, including a summary of material accounting policies
and other explanatory information ('the Standalone Financial Statements').
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial
Statements give the information required by the Companies Act, 2013 ('Act') in the manner so required and give a true and fair
view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, ('Ind AS') and other accounting principles generally accepted in India, of the State of
Affairs of the Company as at 31 March 2026, and its Profit and Other Comprehensive Income, Changes in Equity and its Cash Flows for
the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing ('SAs') specified under section 143(10) of the Act. Our
responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial
Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute
of Chartered Accountants of India ('ICAI') together with the ethical requirements that are relevant to our audit of the Standalone
Financial Statements under the provisions of the Act, and the rules thereunder, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion on the Standalone Financial Statements.
Key audit matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone
Financial Statements of the current year. These matters were addressed in the context of our audit of the Standalone Financial
Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matters
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How the matter was addressed in our audit
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Assessment of impairment loss allowance based on expected
credit loss (ECL) on Loans (Refer Note 9 of the standalone
financial statements)
The loan balances towards vehicle finance, home loans,
loans against property, and other loans aggregating to
? 2,21,941.56 crores and the associated impairment allowances
aggregating to ? 4,370.40 crores are significant to the standalone
financial statements and involves judgement around the
determination of the impairment allowance in line with
the requirements of the Ind AS 109 "Financial Instruments".
Impairment allowances represent management's estimate of
the losses incurred within the loan portfolios at the balance
sheet date and are inherently judgmental. Impairment, based
on ECL model, is calculated using main variables, viz. 'Staging',
'Exposure at Default', 'Probability of Default' and 'Loss Given
Default' as specified under Ind AS 109. Quantitative factors
like days past due, behaviour of the portfolio, historical losses
incurred on defaults and macro- economic data points identified
by the Management's expert and qualitative factors like nature
of the underlying loan, deterioration in credit quality, correlation
of macro-economic variables to determine expected losses,
uncertainty over realisability of security, judgement in relation
to management overlays and related Reserve Bank of India (RBI)
guidelines, to the extent applicable, etc. have been taken into
account in the ECL computation. Given the inherent judgmental
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The audit procedures performed by us to assess appropriateness
of the impairment allowance based on ECL on loans included the
following:
• We understood and evaluated the design and tested the
operating effectiveness of the key controls put in place by the
management over:
i. t he assumptions used in the calculation of ECL and its
various aspects such as determination of Probability of
Default, Loss Given Default, Exposure at Default, Staging
of Loans, etc.
ii. the completeness and accuracy of source data used by the
Management in the ECL computation; and
iii. ECL computations for their reasonableness
• We, along with the assistance of the auditor's IT expert, verified
the appropriateness of methodology and models used by
the Company and reasonableness of the assumptions used
within the computation process to estimate the impairment
provision.
• We test-checked the completeness and accuracy of source
data used.
• We recomputed the impairment provision for a sample of
loans across the loan portfolio to verify the arithmetical
accuracy and compliance with the requirements of Ind AS 109.
• We evaluated the reasonableness of the judgement involved
in management overlays that form part of the impairment
provision, and the related approvals.
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Key audit matters
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How the matter was addressed in our audit
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nature and the complexity of model involved, we determined this
to be a Key Audit Matter.
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• Reviewed the Company's accounting policies for estimation of
Expected Credit Loss on loans and assessing compliance with
the policies in terms of Ind AS 109.
• We evaluated the adequacy of presentation and disclosures
in relation to impairment loss allowance in the standalone
financial statements
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Audit in an Information Technology (IT) enabled environment
- including considerations on exceptions identified in IT
Environment.
The IT environment of the entity involves a few independent and
inter-dependent IT systems used in the operations of the entity
for processing and recording of the business transactions.
As a result, there is a high degree of reliance and dependency on
such IT systems for the financial reporting process of the entity.
Appropriate IT general controls and IT application controls are
required to ensure that such IT systems can process the data as
required, completely, accurately, and consistently for reliable
financial reporting.
We have identified certain key IT applications and the related IT
infrastructure (herein after referred to as "In-scope IT systems"),
which have an impact on the financial reporting process and the
related controls as a key audit matter because of the increased
level of automation; a few systems being used by the entity
for processing financial transactions; the complexity of the IT
architecture; and its impact on the financial records and financial
reporting process of the entity
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Our audit procedures with respect to this matter included the
following:
In assessing the controls over the IT systems, we have involved our
Technology Assurance specialists to obtain an understanding of
the IT environment, IT infrastructure and IT systems.
• With respect to the "In-scope IT systems" identified as relevant
to the audit of the standalone financial statements and
financial reporting process of the entity, we have evaluated
and tested relevant IT general controls or relied upon service
auditor's report, where applicable.
• On such "In-scope IT systems", we have covered the key IT
general controls with respect to the following domains:
• Program change management, which includes that program
changes are moved to the production environment as per
defined procedures and relevant segregation of environment
is ensured.
• User access management, which includes user access
provisioning, de-provisioning, access review, password
management, sensitive access rights and segregation of duties
to ensure that privileged access to applications, operating
system and databases in the production environment were
granted only to authorized personnel.
• Other areas that were assessed under the IT control
environment included backup management, business
continuity and disaster recovery, incident management, batch
processing and monitoring, cybersecurity controls, end user
computing and physical security and datacentre controls.
• We have also evaluated the design and tested the operating
effectiveness of key IT application controls within key business
processes, which included testing automated calculations,
automated accounting procedures, system interfaces, system
reconciliation controls and key system generated reports, as
applicable.
• Where control deficiencies have been identified, we have
tested a combination of compensating controls, remediated
controls and/ or performed alternative audit procedures,
where necessary
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Other Information
5. The Company's Board of Directors are responsible for the other information. The other information comprises the information
included in the Company's annual report but does not include the Standalone Financial Statements and our auditors' report
thereon. The Other Information is expected to be made available to us after the date of this auditor's report
6. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
7. I n connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the Standalone Financial Statements, or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
8. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate action as applicable under the relevant
laws and regulations.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
9. The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to
the preparation of these Standalone Financial Statements that give a true and fair view of the State of Affairs, profit
and Other Comprehensive Income, Changes in Equity and Cash Flows of the Company in) conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended and other accounting principles generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other irregularities; selection of the appropriate
accounting software for ensuring compliance with applicable laws and regulations including those related to retention
of audit logs; selection and application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
10. In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
11. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's responsibilities for the audit of the Standalone Financial Statements
12. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Standalone Financial Statements. As part of an audit in accordance with
SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
12.1. Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
12.2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial
Statements in place and the operating effectiveness of such controls.
12.3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Management.
12.4. Conclude on the appropriateness of the Management's use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
12.5. Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the
disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events
in a manner that achieves fair presentation.
13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
14. We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
15. From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the Standalone Financial Statements of the current year and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
16. As required by the Companies (Auditor's Report) Order, 2020 ('the Order'), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in the 'Annexure A' a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
17. As required by Section 143(3) of the Act, we report that:
17.1. We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
17.2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears
from our examination of those books.
17.3. The standalone balance sheet, the standalone statement of profit and loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report
are in agreement with the books of account.
17.4. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section
133 of the Act read with the relevant rules thereunder.
17.5. On the basis of the written representations received from the directors as on 01 April 2026 taken on record by the
Board of Directors, none of the directors is disqualified as on 31 March 2026 from being appointed as a director
in terms of Section 164(2) of the Act.
17.6. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements
of the Company and the operating effectiveness of such controls, refer to our separate Report in 'Annexure B'.
17.7. In our opinion and according to the information and explanations given to us, the remuneration paid by the
Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.
The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.
18. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the
explanations given to us:
18.1. The Company has disclosed the impact of pending litigations as at 31 March 2026 on its financial position in its
Standalone Financial Statements - Refer Note 39 to the Standalone Financial Statements;
18.2. The Company has made provision, as required under the applicable law or Ind AS, for material foreseeable
losses, if any, on long-term contracts including derivative contracts - Refer Note 7 to the Standalone Financial
Statements;
18.3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company.
18.4. The Management has represented, to best of their knowledge and belief, that no funds have been advanced
or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds)
by the Company to or in any other person(s) or entity(ies), including foreign entities ('Intermediaries'), with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
18.5. The Management has represented, to best of their knowledge and belief, that no funds have been received by the
Company from any person(s) or entity(ies), including foreign entities ('Funding Parties'), with the understanding,
whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
18.6. Based on such audit procedures, that have been considered reasonable and appropriate in the circumstances,
performed by us, nothing has come to our notice that has caused us to believe that the representation under sub
clause (i) and (ii) of Rule 11(e), as provided under para 18.4 and 18.5 above, contain any material misstatement.
18.7. In our opinion and according to the information and explanations given to us, the dividend declared and / or
paid during the year by the Company is in compliance with Section 123 of the Act
18.8. Based on our examination which included test checks, the company has used an accounting software for
maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has
operated throughout the year for all relevant transactions recorded in the software .Further, during the course of
our audit we did not come across any instance of audit trail feature being tampered with.
Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
For B.K. Khare & Co. For KKC & Associates LLP
Chartered Accountants Chartered Accountants (formerly Khimji Kunverji & Co LLP)
Firm Registration Number- 105102W Firm Registration Number: 105146W/W100621
Shirish Rahalkar Devang Doshi
Partner Partner
ICAI Membership Number: 111212 ICAI Membership Number: 140056
UDIN: 26111212IUGWFH6446 UDIN: 26140056LZYEMA5897
Place : Chennai Place : Chennai
Date : 30 April 2026 Date : 30 April 2026
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