Mar 31, 2023
The Directors of your Company have the pleasure in presenting the Fifteenth Annual Report together with the audited financial statements for the financial year ("FY") ended March 31, 2023.
The summary of the Company''s financial performance, both on a consolidated and standalone basis, for FY23 as compared to the previous FY i.e., FY22 is given below:
(R in Cr) |
||||
Particulars |
Consolidated |
Standalone |
||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Continuing Operations Total income |
13,301.70 |
12,323.55 |
360.03 |
350.46 |
Less: Total expenses |
11,171.05 |
11,100.70 |
76.92 |
96.03 |
Profit before exceptional items and tax |
2,130.65 |
1,222.85 |
283.11 |
254.43 |
Exceptional items |
(2,687.17) |
- |
2,858.09 |
- |
Profit before tax |
(556.52) |
1,222.85 |
3,141.20 |
254.43 |
Less: Tax expense |
172.37 |
373.62 |
569.50 |
36.25 |
Profit after tax from continuing operations |
(728.89) |
849.23 |
2,571.70 |
218.18 |
Add: Share in profit of associate company |
- |
- |
- |
- |
Net profit after tax from continuing operations and share in profit of associate company |
(728.89) |
849.23 |
2,571.70 |
218.18 |
Discontinued operations* Profit before tax from discontinued operations |
2,739.34 |
251.96 |
||
Tax expense from discontinued operations |
473.97 |
51.95 |
- |
- |
Profit after tax from discontinued operations |
2,265.37 |
200.01 |
- |
- |
Profit for the year (owners of the Company) |
1,623.25 |
1,070.11 |
2,571.70 |
218.18 |
Actuarial gain on defined benefit plan (gratuity) net of income tax |
(0.18) |
0.67 |
0.04 |
0.11 |
Total comprehensive income for the year (owners of the Company) |
1,623.07 |
1,070.78 |
2571.74 |
218.29 |
Add: Balance brought forward from previous year |
5,423.10 |
4,642.40 |
298.70 |
124.04 |
Transition impact of Ind AS 116 |
- |
- |
- |
- |
Balance Available |
7,046.17 |
5,713.18 |
2,870.44 |
342.33 |
Appropriations Dividend paid (including dividend distribution tax) |
123.75 |
123.75 |
||
Transfer to / (from) Reserve u/s 45-IC of Reserve |
518.37 |
206.05 |
514.34 |
43.63 |
Bank of India Act, 1934 Transfer to impairment reserve |
- |
- |
4.03 |
- |
Transfer to / (from) General Reserve |
- |
- |
- |
- |
Transfer to Reserve u/s 36(1)(viii) of Income Tax Act, 1961 |
69.00 |
50.93 |
- |
- |
Transfer to Capital Redemption Reserve |
35.75 |
33.10 |
- |
- |
Surplus in the Statement of Profit and Loss |
6,299.30 |
5,423.10 |
2228.32 |
298.70 |
* Sale of 100% of the paid-up share capital of L&T Investment Management Limited ("LTIML"), a wholly owned subsidiary of the Company and the asset manager |
||||
of L&T Mutual Fund ("mutual fund business"), to HSBC Asset Management (India) Private Limited completed on November 25, 2022. |
Being a Core Investment Company, the Company''s standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
⢠Total income was R13,301.70 Cr in FY23 as compared to R 12,323.55 Cr in FY22.
⢠Profit before taxes was R 2,130.65 Cr in FY23 as compared to R 1,222.85 Cr in FY22.
⢠Profit for the year attributable to owners of the Company was R 1,623.25 Cr in FY23 as compared to R 1,070.11 Cr in FY22.
During the year, the net loan book declined from R 82,469.44 Cr to R 75,154.55 Cr mainly on account of reduction of the wholesale book in line with Lakshya 2026 strategy.
⢠Total income was R 360.03 Cr in FY23 as compared to R 350.46 Cr in FY22.
⢠Profit before taxes (including exceptional item) was R 3,141.20 Cr in FY23 as compared to R 254.43 Cr in FY22 due to gains arising on sale of mutual fund business.
⢠Profit for the year was R 2,571.70 Cr in FY23 as compared to R 218.18 Cr in FY22.
The Company proposes to transfer R 514.34 Cr (previous year R 43.63 Cr) to Special Reserve created u/s 45-IC of the Reserve Bank of India Act, 1934 ("RBI Act").
The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Companies Act, 2013 ("the Act").
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion and Analysis section.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to
which these financial statements relate and the date of this Report.
The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the website of the Company at https://www. ltfs.com/ investors (click-Dividend Distribution Policy).
The Board of Directors had declared and paid an interim dividend @ 7.95% per share on one series of Cumulative Compulsorily Redeemable Non-Convertible Preference Shares ("NCRPS") of face value of R 100 each of the Company during FY23, entailing an outflow of R 5.64 Cr.
Equity Dividend:
The Board of Directors has recommended a final dividend of R 2 per Equity Share of R 10 each subject to approval of the Members at the ensuing Annual General Meeting ("AGM").
In terms of Ind AS 10, events after the reporting period as notified by the Ministry of Corporate Affairs, the proposed dividend of R 495.93 Cr is not recognised as liability as on March 31, 2023.
The dividend, if approved at the ensuing AGM, would be paid to those Members whose names appear in the Register of Members / Beneficial Owners maintained by the depositories as stated in Notice of the ensuing AGM.
During the year under review, CRISIL Ratings Limited ("CRISIL"), CARE Ratings Limited ("CARE"), India Ratings and Research Private Limited ("India Ratings") and ICRA Limited ("ICRA") have reviewed and reaffirmed the ratings.
Rating agencies |
CRISIL |
CARE |
India Ratings |
ICRA |
Long-term Rating |
CRISIL AAA / Stable |
CARE AAA / Stable |
IND AAA / Stable |
ICRA AAA / Stable |
Short-term Rating |
CRISIL A1 |
CARE A1 |
IND A1 |
ICRA A1 |
The instruments / bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
The instruments with a short-term rating of A1 are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
During the year under review, no fund raising activity was undertaken.
Further, during the year under review, 100% of the proceeds of rights issue raised, have been utilized.
During the year under review, the Company has issued 1,96,500 Equity Shares and 54,39,129 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 ("ESOP Scheme") respectively.
During the year under review, 1,00,00,000 NCRPS amounting to R 100 Cr, which were due for redemption were duly redeemed by the Company and as on March 31, 2023, the Company did not have any outstanding NCRPS.
Pursuant to the allotment of Equity Shares under ESOP Schemes and subsequent redemption of NCRPS, the paid-up share capital of the Company was R 2,479.67 Cr (equity) as at March 31,2023 as compared to R 2,574.03 Cr (equity and preference share capital of R 100 Cr) as at March 31, 2022.
There has been no change in the ESOP Schemes during the year under review. The ESOP Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBSE Regulations").
The disclosures required to be made under the SBSE Regulations are available on the website of the Company at https://www.ltfs.com/investors (click- ESOP Disclosure). The certificate from the Secretarial Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
During the year under review, the Company infused capital in its following subsidiaries by subscribing to the Equity Shares offered by them:
Name of subsidiary company |
Amount of capital subscribed by the Company (R in Cr) |
L&T Finance Limited |
1,980.00 |
L&T Infra Credit Limited (formerly |
51.37 |
known as L&T Infra Debt Fund |
|
Limited) |
|
L&T Financial Consultants Limited |
144.00 |
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company ("NBFC-CIC") pursuant to the receipt of Certificate of Registration from the Reserve Bank of India ("RBI") dated September 11,2013, under Section 45-IA of the RBI Act.
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the RBI Act. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.
The Company being non-deposit taking NBFC-CIC, has not accepted any deposits from the public during the year under review.
The composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.
During the year under review, Ms. Nishi Vasudeva, (DIN: 03016991) an Independent Director who was appointed as an Independent Director of the Company for a term of 5 years i.e., from June 15, 2017 to June 14, 2022, has ceased to be an Independent Director of the Company pursuant to completion of the aforesaid term. Further, Mr. Prabhakar B. (DIN: 02101808), who was eligible to retire by rotation at the previous AGM, did not offer himself for re-appointment as a Director of the Company.
Accordingly, Mr. Prabhakar B., (DIN: 02101808) was not re-appointed and he ceased to be a Director on the Board w.e.f. July 11, 2022.
The Board records its deep appreciation for contribution by Ms. Nishi Vasudeva (DIN: 03016991) and Mr. Prabhakar B. (DIN: 02101808) in guiding and supporting the management during their tenure as the Directors of the Company.
Dr. Rajani R. Gupte (DIN: 03172965) was appointed as an Independent Director of the Company at the Tenth AGM, held on August 28, 2018 for a tenure of 5 years from June 28, 2018 to June 27, 2023. Pursuant to the provisions of Section 149 of the Act read with relevant rules made thereunder, an independent director can hold the office for a term of up to 5 consecutive years on the Board of a company, but is eligible for re-appointment on passing of a special resolution by the company, based on the report of evaluation of performance for another term of up to 5 years. No independent director can hold office for more than two consecutive terms.
Further to the aforesaid and based on the recommendation of the Nomination and Remuneration Committee of the Company ("NRC"), the Board at its Meeting held on April 28, 2023 has approved the re-appointment of Dr. Rajani R. Gupte (DIN: 03172965) as an Independent Director for a second term of 5 consecutive years from June 28, 2023 to June 27, 2028, subject to the approval of the Members by way of a special resolution.
Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. R. Shankar Raman (DIN: 00019798) will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
The terms and conditions of appointment of Independent Directors are available on the website of the Company at https://www.ltfs.com/investors (click-Appointment of ID). The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence pursuant to the provisions of Section
149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his / her ability to discharge his / her duties with an objective independent judgment and without any external influence.
Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details relating to the familiarization programme are available on the website of the Company at https://www. ltfs.com/investors (click - Familiarization Programme).
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI. All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL ("KMPs")
There was no change in the KMPs of the Company during the year under review. As at March 31, 2023, the Company had following KMPs:
1) Mr. Dinanath Dubhashi - Managing Director & Chief Executive Officer
2) Mr. Sachinn Joshi - Chief Financial Officer
3) Ms. Apurva Rathod - Company Secretary
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION/ COMPENSATION FOR DIRECTORS, SENIOR MANAGEMENT PERSONNEL, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, requires the NRC to formulate a policy relating to the remuneration of the Directors, Senior Management Personnel ("SMPs") / KMPs and other employees of the Company and recommend the same for approval of the Board.
Further as per requirements of RBI, the Company being categorized as NBFC-ML, under the Scale
Based Regulations issued by RBI, it is required to put in place a Board approved compensation policy.
Further, Section 134 of the Act stipulates that the Board''s Report is required to include a statement on company''s policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees ("the Policy").
In view of the aforesaid, the Board of Directors has, based on the recommendation of the NRC of the Company, approved the Policy, which is available on the website of the Company at https:// www.ltfs.com/investors (click-Policy on Directors'' Appointment)
B. Brief framework of the Policy
The objective of this Policy is:
a) to guide the Board in relation to appointment and removal of Directors.
b) to formulate criteria for evaluation of Independent Directors and the Members of the Board.
c) to evaluate the performance of the Members of the Board including Independent Directors.
d) to determine criteria for payment of remuneration/ compensation to Directors, SMPs / KMPs and employees.
e) to recommend to the Board remuneration/ compensation payable to the Directors including SMPs, KMPs and employees, if required.
f) to ensure relationship of remuneration/ compensation to performance is clear and meets appropriate performance benchmarks.
C. Appointment of Director(s) - Criteria Identification
The NRC identifies and ascertains the integrity, professional qualification, areas of expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his / her appointment to maintain balance, ensure effective functioning of the Board and ensure orderly succession planning.
The Committee ensures that atleast one of the Directors on the Board has relevant experience of having worked in a bank / NBFC.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and Rules thereunder and SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and SEBI Listing Regulations, before the appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he / she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of a Director is subject to the provisions of the Act and rules thereunder, SEBI Listing Regulations, RBI regulations and other applicable regulations, as the case may be.
Appointment of Managing Director and Whole-Time Director is subject to the provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and Rules thereunder, RBI regulations, SEBI Listing Regulations and such other applicable regulations. A person cannot occupy the position as a Managing Director / Whole-Time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and SMPs / KMPs / Employees
⢠Independent Directors / Non-Executive Directors
The Board / NRC carries out evaluation of performance of Independent Directors / Non-Executive Directors every year ending March 31 on the basis of the following criteria:
a) Membership & Attendance - Board and Committee Meetings;
b) Contribution during such meetings;
c) Active participation in strategic decision making;
d) Inputs to executive management on matters of strategic importance;
e) Performance of the directors;
f) Fulfillment of the independence criteria and their independence from the management; and
g) Such other matters, as the NRC / Board may determine from time to time.
The NRC carries out evaluation of performance of Executive Directors ("EDs") every year ending March 31. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of EDs. The identified KPIs for EDs are approved by the Committee or the Board, pursuant to recommendation of the NRC, if required.
⢠SMPs / KMPs (other than Executive Director) / Employees
The HR Department initiates the process of evaluation of the aforementioned persons every year ending March 31, with the Department Head(s) / Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s) / Management / Department Head(s) / NRC / as prescribed by law or regulator to determine whether the performance benchmarks are achieved. The payment of remuneration / compensation / annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorised to design the framework for evaluating the EDs / SMPs / KMPs / employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during the financial year. Training and Development Orientation programmes on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
E. Criteria for Remuneration
The NRC, while determining and / or recommending the criteria for remuneration / remuneration for Directors, SMPs / KMPs and other employees ensures that:
a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b. the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c. the remuneration to Directors, SMPs and KMPs involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
The NRC with respect to SMPs and KMPs, further ensures that:
i. the compensation levels are supported by the need to retain earnings of the Company and the need to maintain adequate capital based on Internal Capital Adequacy Assessment Process (ICAAP);
ii. the remuneration is reasonable, recognising all relevant factors including adherence to statutory requirements and industry practices; and
iii. the remuneration/compensation packages may comprise of fixed and variable pay components aligned effectively with prudent risk taking to ensure that compensation is adjusted for all types of risks, the compensation outcomes are symmetric with risk outcomes, compensation pay-outs are sensitive to the time horizon of the risks, and the mix of cash, equity and other forms of compensation are consistent with risk alignment.
During the year under review, the Policy was amended / updated to carry out the changes required to be incorporated in accordance with requirements pursuant to regulatory changes.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the SEBI
Listing Regulations, the Board has carried out an annual
evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors is required to be made.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Managing Director & Chief Executive Officer and Chairman of the Board.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
⢠Evaluation of Board as a whole and the Committees is done by the individual directors / members, followed by submission of collation to NRC and feedback to the Board.
b) Independent / Non-Executive Directors Evaluation:
⢠Evaluation done by Board members excluding the Director being evaluated is received and individual feedback is provided to each Director as per the policy for performance evaluation of the Board / its Committees / Directors / as per the process approved by the NRC / Board.
c) Chairperson / Managing Director & Chief
Executive Officer Evaluation:
⢠Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC presents the feedback at the NRC Meeting and subsequently at the Board Meeting.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Securities and Exchange Board of India (''SEBI''), in May 2021, introduced new sustainability related reporting requirements in the specific format of Business Responsibility and Sustainability Report ("BRSR").
In accordance with the requirements of Regulation 34 of the SEBI Listing Regulations, this report includes the Company''s BRSR report. The Company has followed the
framework of the International Integrated Reporting Council (now known as Value Reporting Foundation), the Global Reporting Initiative (''GRI'') and the BRSR principles as prescribed by SEBI.
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming a part of the Annual Report. The certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder and RBI requirements, the Members at their Thirteenth AGM held on July 28, 2021, had appointed M/s KKC and Associates LLP (formerly Khimji Kunverji & Co. LLP), Chartered Accountants (ICAI Registration No. 105146W/W100621) as the Statutory Auditors of the Company for a term of three years, i.e., from the conclusion of Thirteenth AGM till the conclusion of the Sixteenth AGM.
AUDITORS'' REPORT
The Auditors'' Report to the Members for the year under review is unmodified. The Notes to the Accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed M/s Alwyn Jay and Co., Practicing Company Secretary (Membership No.: F3058 and Certificate of Practice No.: 6915) to undertake the Secretarial Audit of the Company for FY23.
Further, in terms of the regulatory requirements, M/s Alwyn Jay and Co. has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI regulations and circulars / guidelines issued thereunder.
The Secretarial Audit Report is appended as Annexure B to this Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to this Report.
In terms of second proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members.
The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the Policy on Directors'' appointment and remuneration / compensation for Directors, Senior Management Personnel, Key Managerial Personnel and other employees and is in accordance with the requirements of the Act and SEBI Listing Regulations and none of the employees listed in the said Annexure are related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering that the Company is a Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy, technology absorption and foreign exchange and outgo as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not fully applicable to its activities.
The details of conservation of energy, technology absorption and foreign exchange earnings and outgo at L&T Finance ("LTF") (i.e. including across all subsidiary companies of the Company) are as follows:
(i) Steps taken or impact on conservation of energy:
⢠Efficient building envelope achieved by use of flash blocks and double-glazed glass units;
⢠Ample day light and views for all office spaces ensured;
⢠Use of treated wastewater for landscape and cooling tower make up water thereby reducing portable water use;
⢠Use of materials with low content of volatile organic compounds;
⢠Electric car charging facilities in basement parking area.
(ii) Steps taken for utilizing alternate sources of energy:
⢠Corporate headquarters and 6 branches of LTF shifted to Renewable Energy;
⢠Solar panels incorporated for external lighting in office premises.
Further details on this aspect is covered under the sustainability performance section.
The details pertaining to technology absorption at LTF (usage of digital and data analytics to build sustainable competitive advantage) are covered in the Management Discussion and Analysis section.
c. Foreign Exchange Earnings and Outgo:
There were no foreign exchange earnings during the year (previous year also Nil); while the expenditure in foreign currency by the Company during the year was R 0.08 Cr (previous year R 0.72 Cr) towards professional fees.
The Company''s Equity Shares are compulsorily tradable in electronic form. As on March 31, 2023, out of the Company''s total equity paid-up share capital comprising of 2,479,671,117 Equity Shares, only 28,896 Equity Shares were in physical form and the remaining capital was in dematerialised form.
As per SEBI notification no. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide notification no. SEBI/LAD-NRO/GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities is not processed unless the securities are held in the dematerialised form with the depositories.
Further, transmission or transposition of securities held in physical or dematerialised form is also effected only in dematerialised form.
Therefore, Members holding securities in physical form are requested to take necessary action to dematerialize their holdings.
The Company conducts its business through its subsidiaries in the various business segments. As of March 31, 2023, the Company had 7 subsidiaries (including step-down subsidiaries). The list of the subsidiary companies is provided in the Corporate Governance (Sustainability Performance) section.
During the year under review, with a view to have a single unified operational lending entity within LTF and to reduce the number of non-operating entities, the Board of Directors of the Company at its Meeting held on January 13, 2023, approved the amalgamation of L&T Finance Limited ("LTFL"), L&T Infra Credit Limited ("LTICL") (formerly known as L&T Infra Debt Fund Limited), L&T Mutual Fund Trustee Limited ("LTMFTL") (LTFL, LTICL, LTMFTL are collectively referred to as "Amalgamating Companies") with the Company by way of merger by absorption pursuant to a scheme of amalgamation and arrangement under the provisions of Sections 230 - 232 read with Section 52 of the Companies Act, 2013 ("Act") and other applicable regulatory requirements (the "Scheme"), resulting in the transfer and vesting of the assets, liabilities and the entire undertaking of the Amalgamating Companies into the Company, followed by the dissolution without winding up of each of the Amalgamating Companies, the consequent cancellation of the equity shares held by the Company in the Amalgamating Companies, certain adjustments to the securities premium account of the Company and various other matters consequential to or otherwise integrally connected with the above.
Pursuant to the Scheme, as approved by the Board, the Company will be required to undergo changes in its regulatory registration requirements / nature of business / activities which may include requirement of obtaining various approvals and making appropriate applications to the regulatory authorities, in this regard.
The necessary approval of the RBI for the aforesaid amalgamation was received on March 24, 2023.
The Scheme is, inter alia, subject to the sanction of the National Company Law Tribunal benches at Mumbai and Kolkata ("NCLT") and requisite approvals of the shareholders and / or creditors of the Company, if so directed by the NCLT, and subject to compliance with applicable laws and receipt of any regulatory or other approvals, if required.
During the year under review, 100% of the paid-up share capital of L&T Investment Management Limited, a wholly-owned subsidiary of the Company and the asset manager of L&T Mutual Fund, has been sold to HSBC Asset Management (India) Private Limited on November 25, 2022, post receipt of necessary regulatory approvals.
As required under Regulations 16(1 )(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the policy for determining Material Subsidiaries. The details of the policy for determining Material Subsidiaries are available on the website of the Company at https://www.ltfs.com/investors (click-Policy on Material Subsidiaries).
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY / ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to this Report. The highlights of performance of the businesses of subsidiaries and the contribution thereof is given as a part of the Management Discussion and Analysis section.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirm that, to the best of its knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter in line with the Board approved Risk Based Internal Audit Policy.
The IA function of LTF monitors and evaluates the efficacy and adequacy of the internal control system in the Company to ensure that financial reports are reliable, operations are effective and efficient and activities comply with applicable laws and regulations. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee ("AC") of the Company from time to time.
The details of the Board meetings held during FY23 are disclosed in the Corporate Governance Report appended to this Report.
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI regulations. The details of the same are disclosed in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") and ESG Committee. The composition and terms of reference of the CSR & ESG Committee are provided in the Corporate Governance Report.
The Company has also formulated a CSR policy ("CSR Policy") in accordance with the requirements of the Act containing details specified therein, which is available on the website of the Company at https://www.ltfs.com/csr (click-CSR Policy).
The Company has a strong commitment towards promoting inclusive social transformation in rural communities through its CSR efforts. The CSR interventions are aligned with the Sustainable Development Goals, which indicates a holistic approach towards social responsibility. The project-based accountability approach with a focus on social impact, scale, and sustainability reflects the Company''s commitment to creating shared value for all stakeholders.
The Company has updated its CSR policy by revising the Vision and Mission statement which is aligned with Company''s Lakshya 2026 and indicates a proactive approach towards adapting to changing business environments.
Overall, the Company''s CSR efforts are well-aligned with its business objectives, regulatory requirements, and social responsibility principles.
Considering that there is no aggregate net profit for the preceding three financial years calculated pursuant to the Act, the Company did not have an obligation to spend any amount on CSR interventions during FY23. The total amount spent on CSR activities by the subsidiaries of the Company was R 19.65 Cr.
An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to this Report.
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has adopted a Vigil Mechanism Framework, under which the Whistle Blower Investigation Committee has been set up. The objective of the framework is to establish a redressal forum, which addresses all concerns raised
on questionable practices and through which all the stakeholders such as Employees, Directors and service providers (agency, vendor, contractor or any outsourced partner) can raise actual or suspected violations.
Necessary details pertaining to the framework are disclosed in the Corporate Governance Report appended to this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, have been disclosed in the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on the website of the Company at https://www.ltfs.com/investors (click-RPT Policy). The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
⢠All transactions with related parties ("RPTs") irrespective of its materiality and any subsequent material modification to any existing RPTs are referred to the AC of the Company for prior approval. The process of approval of RPTs by the AC, Board and Shareholders is as under:
All RPTs and subsequent material modification, irrespective of whether they are in the ordinary course of business or at an arm''s length basis require prior approval of AC.
Only those members of the AC who are independent directors approve RPTs.
RPTs to which the subsidiary of the Company is a party but the Company is not a party, require prior approval of the AC if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds ten per cent of the annual standalone turnover, as per the
last audited financial statements of the listed entity with effect from April 1, 2023.
Generally, all RPTs are in the ordinary course of business and at arm''s length price.
RPTs which are not at arm''s length and which are not in the ordinary course of business and / or which requires shareholders'' approval, are approved by the Board.
All material RPTs and subsequent material modification thereof, require approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting.
Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by an ordinary resolution in the general meeting, it is required to be ratified by the Board or the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.
Prior approval of the AC and the shareholders is not required for a transaction to which the listed subsidiary of the Company is party but the Company is not a party, if Regulation 23 and Regulation 15(2) of the SEBI Listing Regulations are applicable to such listed subsidiary.
The transactions between the following are exempted from the approval requirements as per SEBI Listing Regulations and / or the Act:
⢠holding company and its wholly-owned subsidiary;
⢠two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company.
TRANSACTIONS WITH RELATED PARTIES
All RPTs that were entered into during FY23 were on an arm''s length basis and in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to notes to the Financial Statements which sets out related party disclosures.
The Company has constituted a Group Risk Management Committee ("GRMC") in terms of the requirements of Regulation 21 of the SEBI Listing Regulations and RBI regulations and has also adopted a Risk Management Policy. The details of the same are disclosed in the Corporate Governance Report.
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC and the Board is kept apprised of the proceedings of the meetings of the GRMC and also apprised about the risk management framework at its subsidiaries. The Company, as it advances towards its business objectives and goals, is often subjected to various risks. Credit risk, market risk, liquidity risk, ESG risk, model risk, reputation and strategic risk and operational risk are some of the risks that your Company is exposed to and details of the same are provided in the Management Discussion and Analysis and Sustainability Performance section.
POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Further, the Company has constituted an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where complaints in the nature of sexual harassment can be registered. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
ANNUAL RETURN AS PRESCRIBED UNDER THE ACT
The Annual Return in Form MGT-7 as required under Section 92(3) of the Act is available on the website of the Company at https://www.ltfs.com/investors (click -Annual Return).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators / courts which would impact the going concern status of the Company and its future operations.
Further, no penalties have been levied by RBI / any other regulators during the year under review.
The Company has complied with the applicable regulations of RBI.
During the year under review, the Company has not obtained any registration / license / authorisation, by whatever name called from any other financial sector regulators except as required in connection with the amalgamation stated earlier in this Report.
The Directors express their sincere gratitude and appreciation to all those who have contributed to the success of the Company during the past year. It is through the collective effort and dedication of many stakeholders that we have achieved our goals and milestones.
We express our sincere gratitude to the RBI, SEBI, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company''s bankers for the ongoing support extended by them.
We would also like to thank our valued customers for their trust and continued support. Our shareholders and investors deserve special recognition for their confidence in our vision and for their ongoing partnership.
Lastly we extend our deepest appreciation to our employees, whose hard work, commitment, and innovative ideas have been instrumental in driving our growth and success. Their unwavering dedication and professionalism have played a significant role in overcoming challenges and seizing opportunities.
For and on behalf of the Board of Directors L&T Finance Holdings Limited
S.N. Subrahmanyan Dinanath Dubhashi
Non-Executive Director & Managing Director &
Chairman Chief Executive Officer
DIN:02255382 DIN:03545900
Place: Mumbai Date: June 08, 2023
Mar 31, 2022
The Directors of your Company have the pleasure in presenting the Fourteenth Annual Report together with the audited financial statements for the financial year ("FY") ended March 31, 2022.
The summary of the Company''s financial performance, both on a consolidated and standalone basis, for FY22 as compared to the previous FY i.e., FY21 is given below:
(? in Cr) |
||||
Particulars |
Consolidated |
Standalone |
||
2021-22 |
2020-21 |
2021-22 |
2020-21 |
|
Continuing Operations Total income |
12,323.55 |
13,753.33 |
350.46 |
191.42 |
Less: Total expenses |
11,100.70 |
12,717.60 |
96.03 |
227.31 |
Profit before exceptional items and tax |
1,222.85 |
1,035.73 |
254.43 |
(35.89) |
Exceptional items |
- |
225.61 |
- |
224.68 |
Profit before tax |
1,222.85 |
1,261.34 |
254.43 |
188.79 |
Less: Tax expense |
373.62 |
523.1 1 |
36.25 |
72.74 |
Profit after tax from continuing operations |
849.23 |
738.23 |
218.18 |
116.05 |
Add: Share in profit of associate company |
- |
- |
- |
- |
Net profit after tax from continuing operations and share in profit of associate company |
849.23 |
738.23 |
218.18 |
116.05 |
Discontinued operations* Profit before tax from discontinued operations |
251.96 |
233.86 |
||
Tax expense from discontinued operations |
51.95 |
23.21 |
- |
- |
Profit after tax from discontinued operations |
200.01 |
210.65 |
- |
- |
Profit for the year (owners of the Company) |
1,070.11 |
970.94 |
218.18 |
116.05 |
Actuarial gain on defined benefit plan (gratuity) net of income tax |
0.67 |
2.76 |
0.11 |
0.11 |
Total comprehensive income for the year (owners of the Company) |
1,070.78 |
973.70 |
218.29 |
116.16 |
Add: Balance brought forward from previous year |
4,642.40 |
3,720.68 |
124.04 |
31.68 |
Transition impact of Ind AS 116 |
- |
- |
- |
- |
Balance Available |
5,713.18 |
4,694.38 |
342.33 |
147.84 |
Appropriations Dividend paid (including dividend distribution tax) |
||||
Transfer to/(from) Reserve u/s 45-IC of Reserve Bank |
206.05 |
38.33 |
43.63 |
23.21 |
of India Act, 1934 Transfer to impairment reserve |
- |
12.54 |
- |
0.59 |
Transfer to/(from) General Reserve |
- |
1.11 |
- |
- |
Transfer to Reserve u/s 36(1)(viii) of Income Tax Act, 1961 |
50.93 |
- |
- |
- |
Transfer to Capital Redemption Reserve |
33.10 |
- |
- |
- |
Surplus in the Statement of Profit and Loss |
5,423.10 |
4,642.40 |
298.70 |
124.04 |
* As required by Ind AS 105, L&T Investment Management Limited, the wholly-owned subsidiary of the Company has been presented in the financial statements as "Non current assets held for sale and discontinued operations"
Being a Core Investment Company, the Company''s standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
Consolidated
⢠Total income was '' 12,323.55 Cr in FY22 as compared to '' 13,753.33 Cr in FY21.
⢠Profit before taxes was '' 1,222.85 Cr in FY22 as compared to '' 1,261.34 Cr in FY21.
⢠Profit for the year attributable to the owners of the Company was '' 1,070.11 Cr in FY22 as compared to '' 970.94 Cr in FY21.
During the year, the net loan book declined from '' 87,030.25 Cr to '' 82,469.44 Cr.
The Average Assets Under Management in the Mutual Fund business stood at ''75,592 Cr for the quarter ended March 31, 2022 as against '' 72,728 Cr for the quarter ended March 31,2021.
Standalone
⢠Total income was '' 350.46 Cr in FY22 as compared to '' 191.42 Cr in FY21.
⢠Profit before taxes was '' 254.43 Cr in FY22 as compared to '' 188.79 Cr in FY21.
⢠Profit for the year was '' 218.18 Cr in FY22 as compared to '' 116.05 Cr in FY21.
Appropriations
The Company proposes to transfer '' 43.63 Cr (previous year '' 23.21 Cr) to Special Reserve created u/s 45-IC of the Reserve Bank of India Act, 1934 ("RBI Act").
Cost Records
The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Companies Act, 2013 ("the Act").
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion and Analysis section.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.
The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the website of the Company at https://www. ltfs.com/ investors.html (click-Dividend Distribution Policy).
The Board of Directors had declared and paid an interim dividend @ 8.95%, 8.00%, 7.95% (four options), 7.60% and 7.50% per share on the eight series of cumulative, non-convertible, compulsorily redeemable, preference shares ("NCRPS") of face value of ''100 each of the Company during FY22, entailing an outflow of '' 53.15 Cr. Dividend was paid on a pro-rata basis on NCRPS which were redeemed on an early basis post necessary approvals.
The Board of Directors is pleased to recommend a final dividend of '' 0.50 per Equity Share of ''10 each subject to approval of the Members at the ensuing Annual General Meeting ("AGM").
In terms of Ind AS 10, events after the reporting period as notified by the Ministry of Corporate Affairs, the proposed dividend of ''123.70 Cr is not recognised as liability as on March 31, 2022.
The dividend, if approved at the ensuing AGM, would be paid to those Members whose names appear in the Register of Members / Beneficial Owners maintained by the depositories as stated in Notice of the ensuing AGM.
During the year under review, CRISIL Ratings Limited ("CRISIL"), CARE Ratings Limited ("CARE"), India Ratings and Research Private Limited ("India Ratings") and ICRA Limited ("ICRA") have reviewed and reaffirmed the ratings on various debt instruments of the Company. ICRA revised the outlook on long-term ratings from ''Negative'' to ''Stable'' in August 2021.
Instruments |
Rating agencies |
|||
CRISIL |
CARE |
India Ratings |
ICRA |
|
Non convertible Debentures |
CRISIL AAA/Stable (Triple A; Outlook: Stable by CRISIL) |
CARE AAA/ Stable (Triple A; Outlook: Stable by CARE) |
IND AAA/ Stable (Triple A; Outlook: Stable by India Ratings) |
ICRA AAA/ Stable (Triple A; Outlook: Stable by ICRA) |
Instruments |
Rating agencies |
|||
CRISIL |
CARE |
India Ratings |
ICRA |
|
Preference Shares |
CRISIL AAA/Stable (Triple A; Outlook: Stable by CRISIL) |
CARE AAA (RPS)/Stable (Triple A [Redeemable Preference Shares]; Outlook: Stable by CARE) |
||
Commercial Papers |
CRISIL A1 (A One Plus by CRISIL) |
CARE A1 (A One Plus by CARE) |
IND A1 (A One Plus by India Ratings) |
ICRA A1 (A One Plus by ICRA) |
The instruments / bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
The instruments with short term ratings of A1 are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
During the year under review, no fund raising activity was undertaken.
Further, during the year under review, there has been no deviation in the utilisation of rights issue proceeds from the objects stated in the letter of offer dated January 19, 2021.
During the year under review, the Company has issued 3,17,000 Equity Shares and 42,72,784 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 ("ESOP Schemes") respectively.
During the year under review, 2,50,00,000 NCRPS amounting to '' 250 Cr, which were due for redemption were duly redeemed by the Company.
During the year under review, 7,74,10,000 NCRPS amounting to '' 774 Cr, were duly redeemed by the Company pursuant to the resolutions passed by the respective NCRPS holders by way of postal ballot for early redemption of the said NCRPS.
Pursuant to the allotment of Equity Shares under ESOP Schemes and subsequent redemption of NCRPS, the paid-up share capital of the Company was '' 2,574.03 Cr (including preference share capital of '' 100 Cr) as at March 31, 2022 as compared to '' 3,593.55 Cr (including preference share capital of '' 1,124.10 Cr) as at March 31,2021.
There has been no material change in the ESOP Schemes during the year under review. The ESOP Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBSE Regulations").
The disclosures required to be made under the SBSE Regulations are available on the website of the Company at https://www. ltfs.com/investors.html (click-ESOP Disclosure). The certificate from the Secretarial Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
During the year under review, the Company has not made any investments in its subsidiaries.
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company ("NBFC-CIC") pursuant to the receipt of Certificate of Registration from the Reserve Bank of India ("RBI") dated September 11, 2013, under Section 45-IA of the RBI Act.
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the RBI Act. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.
The Company being non-deposit taking NBFC-CIC, has not accepted any deposits from the public during the year under review.
The composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.
Mr. Dinanath Dubhashi (DIN: 03545900) was re-appointed as the Managing Director & Chief Executive Officer of the Company for a term of upto 5 years with effect from April 14, 2021 to April 13, 2026 by the Board based on recommendation of the Nomination and Remuneration Committee ("NRC") of the Company and the re-appointment was approved by the Members at the Thirteenth AGM held on July 28, 2021.
During the year under review, the Board, based on the recommendation of the NRC approved the appointment of Mr. S.N.Subrahmanyan (DIN: 02255382) as the Non-Executive Director and Chairperson of the Board with effect from February 28, 2022. The appointment of Mr. S.N.Subrahmanyan as the Non-Executive Director was approved by the Members by way of a postal ballot in accordance with the provisions of Sections 152 and 161 of the Act and SEBI Listing Regulations. Mr. Shailesh Haribhakti ceased to be the Chairperson of the Board with effect from February 28, 2022.
Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. Dinanath Dubhashi will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
Further, Mr. Prabhakar B. (DIN: 02101808), Director of the Company who also retires by rotation at the ensuing AGM has expressed his desire to not seek reappointment. It is proposed not to fill up the vacancy thereby caused. The Board records its deep appreciation for contribution by Mr. Prabhakar B. in guiding and supporting the management during his tenure as a Director of the Company.
The terms and conditions of appointment of Independent Directors are also available on the website of the Company at https://www. ltfs.com/investors.html (click-Appointment of ID).
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his / her ability to discharge his / her duties with an objective independent judgment and without any external influence.
Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details relating to the familiarization programme are available on the website of the Company at https://www.ltfs.com/investors.html (click Familiarization Programme).
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI. All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL ("KMPs")
There was no change in the KMPs of the Company during the year under review. As at March 31, 2022, the Company had following KMPs:
1) Dinanath Dubhashi - Managing Director & Chief Executive Officer
2) Sachinn Joshi - Chief Financial Officer
3) Apurva Rathod - Company Secretary
COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
A. Background and objectives
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, requires the NRC to formulate
a policy relating to the remuneration of the Directors, Senior Management / KMPs and other employees of the Company and recommend the same for approval of the Board.
Further, Section 134 of the Act stipulates that the Board''s Report is required to include a statement on company''s policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees ("the Policy").
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the Policy, which is available on the website of the Company at
https://www.ltfs.com/investors.html (click-Policy on Directors'' Appointment).
B. Brief framework of the Policy
The objective of this Policy is:
a) to determine inter-alia, qualifications, positive attributes and independence of a Director;
b) to guide on matters relating to appointment and removal of Directors and Senior Management;
c) to lay down criteria / evaluate performance of the Directors;
d) to guide on determination of remuneration of the Directors, Senior Management / KMPs and other employees; and
e) To ensure relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
C. Appointment of Director(s) - Criteria Identification
The NRC identifies and ascertains the integrity, professional qualification, expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his / her appointment.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and Rules thereunder and SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and SEBI Listing Regulations, before the
appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he / she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of a Director is subject to the provisions of the Act and SEBI Listing Regulations.
Appointment of Managing Director and Wholetime Director is subject to the provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and Rules thereunder. A person cannot occupy the position as a Managing Director / Whole- time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and Senior Management / KMPs / Employees
⢠Independent Directors / Non-Executive Directors
The NRC carries out evaluation of performance of Independent Directors / Non-Executive Directors every year ending March 31 on the basis of the foll owi ng criteria:
a) Membership & Attendance - Board and Committee Meetings;
b) Contribution during such meetings;
c) Active participation in strategic decision making;
d) Inputs to executive management on matters of strategic importance;
e) Performance of the directors;
f) Fulfillment of the independence criteria and their independence from the management; and
g) Such other matters, as the NRC / Board may determine from time to time.
The NRC carries out evaluation of performance of Executive Directors ("EDs") every year ending March 31. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the
distinct roles of EDs. The identified KPIs for EDs are approved by the Board, pursuant to recommendation of the NRC, if required.
⢠Senior Management / KMPs / Employees
The HR Department initiates the process of evaluation of the aforementioned persons every year ending March 31, with the Department Head(s) / Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s) / Management / Department Head(s) / NRC / as prescribed by law or regulator to determine whether the performance benchmarks are achieved. The payment of remuneration / annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorised to design the framework for evaluating the EDs / Senior Management / KMPs / employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during the financial year. Training and Development Orientation programmes on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
E. Criteria for Remuneration
The NRC, while determining and / or recommending the criteria for remuneration / remuneration for Directors, Senior Management / KMPs and other employees ensure that:
a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b. relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c. remuneration to Directors, Senior Management / KMPs involves a balance between fixed and incentive pay reflecting
short and long-term performance objectives appropriate to the working of the Company and its goals.
During the year under review, the Policy was amended to carry out the changes as required due to changes in the regulatory provision(s).
Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors is required to be made.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Managing Director & Chief Executive Officer and Chairperson of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
⢠Evaluation of the Board as a whole and the Committees is done by the individual Directors / members, followed by submission of collation to NRC for discussion and feedback to the Board.
b) Independent / Non-Executive Directors
Evaluation:
⢠Evaluation done by Board members excluding the Director being evaluated is received and individual feedback is provided to each Director as per the policy for performance evaluation of the Board / its Committees / Directors / as per the process approved by the NRC / Board.
c) Chairperson / Managing Director & Chief
Executive Officer Evaluation:
⢠Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC presents the feedback at the NRC Meeting and subsequently at the Board Meeting.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The 1st Integrated Report of the Company titled ''Driving Sustainable Growth-People, Business, Community'', will be made available on the website of the Company at https://www.ltfs.com/csr.html. This report has been prepared in accordance with the principles of International Integrated Reporting Council''s (IIRC''s) Framework. The disclosures have been made in accordance with the Global Reporting Initiative (GRI) Standards. Additionally, on a voluntary basis the Company has provided cross referencing to Business Responsibility and Sustainability Report ("BRSR") disclosures specified by SEBI in its circular SEBI/HO/ CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021 in its Integrated Report.
Further, in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, the Company is required to submit a Business Responsibility Report ("BRR") as a part of the Annual Report. The Company''s BRR describing the initiatives taken by the Company is hosted on the website of the Company at https://www. ltfs.com/ investors.html (click-Business Responsibility Report).
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming a part of the Annual Report. The certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder and RBI requirements, the Members at their Thirteenth AGM held on July 28, 2021, had appointed M/s Khimji Kunverji and Co. LLP, Chartered Accountants (ICAI Registration No. 105146W/W100621) as the Statutory Auditors of the Company for a term of three years, i.e., from the conclusion of Thirteenth AGM till the conclusion of the Sixteenth AGM.
The Auditors'' Report to the Members for the year under review is unmodified. The Notes to the Accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed M/s Alwyn Jay and Co., Practicing Company Secretary (Membership No.: F3058 and Certificate of Practice No.: 6915) to undertake the Secretarial Audit of the Company for FY22.
Further, in terms of the provisions of Regulation 24A of the SEBI Listing Regulations and Circular No. CIR/ CFD/CMD1/27/2019 dated February 8, 2019 issued by SEBI, M/s Alwyn Jay and Co. has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI regulations and circulars / guidelines issued thereunder.
The Secretarial Audit Report is appended as Annexure B to this Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to this Report.
In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members.
The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the Policy on Directors'' appointment and remuneration for Directors, KMPs and other employees and is in accordance with the requirements of the Act and SEBI Listing Regulations and none of the employees listed in the said Annexure are related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering that the Company is a Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy and technology absorption as required to be
disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.
The details of conservation of energy and technology absorption at L&T Financial Services ("LTFS") are as follows:
a. Conservation of Energy
(i) Steps taken or impact on conservation of energy:
⢠Installation of sensor-based lighting within the office premises which automatically turns the lights off when not in use.
⢠Set up of variable frequency drives for air handling units and pumps for optimum use of electricity.
⢠Installation of LED-based energy efficient lighting fixtures in the office premises.
⢠Optimisation of office space across branches leading to relocation of 24 branches, thereby achieving better energy efficiency.
⢠Installation of energy efficient ACs in offices.
⢠Installation of Automatic Tube Cleaning System (ATC system) for maintenance of chiller.
(ii) Steps taken for utilizing alternate sources of energy:
⢠Corporate headquarters shifted to Renewable Energy.
b. Technology Absorption:
The details pertaining to technology absorption at LTFS (usage of digital and data analytics to build sustainable competitive advantage) are covered in the Management Discussion and Analysis section.
c. Foreign Exchange Earnings and Outgo:
There were no foreign exchange earnings during the year (previous year also Nil); while the expenditure in foreign currency by the Company during the year was '' 0.72 Cr (previous year '' 0.69 Cr) towards professional fees.
The Company''s Equity Shares are compulsorily tradable in electronic form. As on March 31, 2022, out of the Company''s total equity paid-up share capital comprising of 247,40,35,488 Equity Shares, only 29,551 Equity Shares were in physical form and the remaining capital was in dematerialised form.
As per SEBI notification No. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide
notification No. SEBI/LAD-NRO/GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities is not processed from April 1,2019 unless the securities are held in the dematerialised form with the depositories.
Further, with effect from January 24, 2022,
transmission or transposition of securities held in physical or dematerialised form is also effected only in dematerialised form.
Therefore, Members holding securities in physical form are requested to take necessary action to dematerialize their holdings.
The Company conducts its business through its subsidiaries in the various business segments. As of March 31, 2022, the Company had 8 subsidiaries (including step-down subsidiaries).
During the year under review, the Board of Directors of the Company at its meeting held on December 23, 2021 had approved the sale of 100% of the paid-up share capital of L&T Investment Management Limited, a wholly-owned subsidiary of the Company and the asset manager of1 L&T Mutual Fund, to HSBC Asset Management (India) Private Limited. The said sale is subject to receiptof necessary approvals.
As required under Regulations 16(1 )(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the policy for determining Material Subsidiaries. The details of the policy for determining Material Subsidiaries are available on the website of the Company at https://www.ltfs.com/investors.html (click-Policy on Material Subsidiaries).
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter in line with the Board approved Risk Based Internal Audit Policy.
The IA function of LTFS monitors and evaluates the efficacy and adequacy of the internal control system in the Company to ensure that financial reports are reliable, operations are effective and efficient and activities comply with applicable laws and regulations. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee ("AC") of the Company from time to time.
BOARD MEETINGS
The details of the Board meetings held during FY22 are disclosed in the Corporate Governance Report appended to this Report.
COMPOSITION OF AUDIT COMMITTEE
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI regulations. The details of the same are disclosed in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") and ESG Committee. The composition and terms of reference of the CSR & ESG Committee are provided in the Corporate Governance Report.
The Company has also formulated a CSR policy ("CSR Policy") in accordance with the requirements of the Act containing details specified therein, which is available on the website of the Company at https://www.ltfs.com/csr.html (click-CSR Policy).
The Company aims to promote inclusive social transformation of the rural communities by nurturing and creating opportunities for sustainable livelihoods. The CSR efforts of the Company closely align with the Sustainable Development Goals (SDGs), particularly,
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY / ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to this Report. The highlights of performance of the businesses of subsidiaries and the contribution thereof is given as a part of the Management Discussion and Analysis section.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirm that, to the best of its knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2022 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
''No Poverty'' (SDG 1), ''Gender Equality'' (SDG 5), ''Sustainable Cities and Communities'' (SDG 11), ''Climate Action'' (SDG 13) and ''Partnership for the Goals'' (SDG 17). The CSR interventions follow a project-based accountability approach, emphasizing on the principles of ''Social impact'', ''Scale'' and ''Sustainability'' to create shared value for all stakeholders. The key projects are undertaken in focused areas of interventions, viz, Digital Financial Inclusion, Disaster Management and other initiatives.
During the year under review, the CSR Policy has been updated as below:
⢠Revision in the thrust areas based on Company strategy
⢠Changes aligned with the amendment to the Act Considering that there is no aggregate net profit for the preceding three financial years calculated pursuant to the Act, the Company did not have an obligation to spend any amount on CSR interventions during FY22. The total amount spent on CSR activities by the subsidiaries of the Company was '' 24.44 Cr.
An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to this Report.
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act, the Company has adopted a Vigil Mechanism Framework, under which the Whistle Blower Investigation Committee has been set up. The objective of the framework is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which the Directors, employees and service providers can raise actual or suspected violations.
Necessary details pertaining to the framework are disclosed in the Corporate Governance Report appended to this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, have been disclosed in the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on the website of the Company at https://www.ltfs.com/investors.html (click-RPT Policy). The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
⢠All transactions with related parties ("RPTs") irrespective of its materiality and any subsequent material modification to any existing RPTs are referred to the AC of the Company for prior approval. The process of approval of RPTs by the AC, Board and Shareholders is as under:
All RPTs and subsequent material modification, irrespective of whether they are in the ordinary course of business or at an arm''s length basis require prior approval of AC.
Only those members of the AC who are independent directors approve RPTs.
RPTs to which the subsidiary of the Company is a party but the Company is not a party, require prior approval of the Company if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds ten per cent of the annual consolidated turnover, as per the last audited financial statements of the listed entity with effect from April 1, 2022.
Generally, all RPTs are in the ordinary course of business and at arm''s length price.
RPTs which are not at arm''s length and which are not in the ordinary course of business and / or which requires shareholders'' approval, are approved by the Board.
All material RPTs and subsequent material modification thereof, require approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting.
Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by an ordinary resolution in the general meeting, it is required to be ratified by the Board or the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.
Prior approval of the AC and the shareholders is not required for a transaction to which the listed subsidiary is party but the Company is not a party, if Regulation 23 and Regulation 15(2) of the SEBI Listing Regulations are applicable to such listed subsidiary.
The following transactions are exempted from the approval requirements as per SEBI Listing Regulations and / or the Act:
⢠holding company and its wholly-owned subsidiary;
⢠two wholly-owned subsidiaries of the listed holding company, whose accounts are consolidated with such holding company.
TRANSACTIONS WITH RELATED PARTIES
All RPTs that were entered into during FY22 were on an arm''s length basis and in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3) (h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to notes to the Financial Statements which sets out related party disclosures.
The Company has constituted a Group Risk Management Committee ("GRMC") in terms of the requirements of Regulation 21 of the SEBI Listing Regulations and RBI regulations and has also adopted
a Risk Management Policy. The details of the same are disclosed in the Corporate Governance Report.
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC and the Board is kept apprised of the proceedings of the meetings of the GRMC and also apprised about the risk management framework at its subsidiaries. The Company, as it advances towards its business objectives and goals, is often subjected to various risks. Credit risk, market risk, liquidity risk, ESG risk and operational risk are some of the risks that your Company is exposed to and details of the same are provided in the Management Discussion and Analysis section.
PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Further, the Company has constituted an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where complaints in the nature of sexual harassment can be registered. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
ANNUAL RETURN AS PRESCRIBED UNDER THE ACT
The Annual Return in Form MGT-7 as required under Section 92(3) of the Act is available on the website of the Company at https://www.ltfs.com/investors.html (click-Annual Return).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators / courts which would impact the going concern status of the Company and its future operations.
Further, no penalties have been levied by RBI / any other regulators during the year under review.
The Company has complied with the applicable regulations of RBI as on March 31, 2022.
sincerely appreciate the commitment displayed by the employees of the Company and its subsidiaries across all levels, for exhibiting outstanding performance during such challenging times.
For and on behalf of the Board of Directors L&T Finance Holdings Limited
S.N.Subrahmanyan Dinanath Dubhashi
Non-Executive Director Managing Director
& Chairperson & Chief Executive Officer
DIN: 02255382 DIN: 03545900
Place: Mumbai Date: April 29, 2022
During the year under review, the Company has not obtained any registration / license / authorisation, by whatever name called from any other financial sector regulators.
The Directors express their sincere gratitude to the RBI, SEBI, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company''s bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Company''s stakeholders and trust reposed by them in the Company. The Directors
Mar 31, 2021
The Directors of your Company have the pleasure in presenting the Thirteenth Annual Report together with the audited financial statements for the financial year ("FY") ended March 31,2021.
The summary of the Company''s financial performance, both on a consolidated and standalone basis, for FY 7070-71 as compared to the previous FY 2019-20 is given below
(''in Cr) |
||||
Particulars |
Consolidated |
Standalone |
||
2020-21 |
2019-20 |
2020-21 |
2019-20 |
|
Total Income |
14,080.10 |
14,476.75 |
191.42 |
522.38 |
Less: Total Expenses |
12,810.51 |
11,796.67 |
227.31 |
238.64 |
Profit before exceptional items and tax |
1,269.59 |
2,680 |
(35.89) |
283.74 |
Exceptional items |
225.61 |
- |
224.68 |
- |
Profit before Tax |
1,495.20 |
2,680.08 |
188.79 |
283.74 |
Less: Tax Expense |
546.32 |
979.82 |
72.74 |
16.93 |
Profit after Tax |
948.88 |
1,700.26 |
116.05 |
266.81 |
Add: Share in profit of associate company |
- |
- |
- |
- |
Net profit after tax and share in profit of associate company |
948.88 |
1,700.26 |
116.05 |
266.81 |
Profit for the year (owners of the Company) |
970.94 |
1,700.17 |
116.05 |
266.81 |
Actuarial gain on defined benefit plan (gratuity) net of income tax |
2.76 |
(4.59) |
0.11 |
(0.11) |
Total comprehensive income for the year (owners of the Company) |
973.70 |
1,695.58 |
116.16 |
266.70 |
Add: Balance brought forward from previous year |
3,720.68 |
2,771.41 |
31.68 |
203.20 |
Transition impact of Ind AS 116 |
- |
(2.35) |
- |
(0.03) |
Balance Available |
4,694.38 |
4,464.64 |
147.84 |
469.87 |
Appropriations |
||||
Dividend paid (including dividend distribution tax) |
- |
422.33 |
- |
380.48 |
Transfer to/(from) Reserve u/s 45-IC of Reserve Bank of India Act, 1934 |
35.86 |
225.06 |
23.21 |
53.36 |
Transfer to impairment reserve |
12.54 |
15.82 |
0.59 |
4.35 |
Transfer to/(from) Debenture Redemption Reserve |
- |
- |
- |
- |
Transfer to Reserve u/s 36(1 )(viii) of Income Tax Act, 1961 |
- |
80.75 |
- |
- |
Transfer to Reserve u/s 29-C of National Housing Bank |
- |
- |
- |
- |
Surplus in the Statement of Profit and Loss |
4,645.98 |
3,720.68 |
124.04 |
31.68 |
FINANCIAL PERFORMANCE
Being a Core Investment Company, the Company''s standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
Consolidated
⢠Total income was ''14,080.10 Cr in FY 2020-21 as compared to ''14,476.75 Cr in FY 2019-20.
⢠Profit before taxes was ''1,495.20 Cr in FY 2020-21 as compared to ''2,680.08 Cr in FY 2019-20.
⢠Profit for the year attributable to owners of the Company was ''970.94 Cr in FY 2020-21 as compared to ''1,700.17 Cr in FY 2019-20.
During the year, the net loan book declined from ''91,324.63 Cr to ''87,030.25 Cr.
The Average Assets Under Management ("AAUM") in the mutual fund business stood at ''72,728 Cr for the quarter ended March 31, 2021 as against ''71,056 Cr for the quarter ended March 31, 2020.
Instruments |
Rating agencies |
|||
CRISIL |
CARE |
India Ratings |
ICRA |
|
Non convertible Debentures |
CRISIL AAA/Stable (Triple A; Outlook: Stable by CRISIL) |
CARE AAA/ Stable (Triple A; Outlook: Stable by CARE) |
IND AAA/ Stable (Triple A; Outlook: Stable by India Ratings) |
ICRA AAA/ Negative (Triple A: Outlook: Negative by ICRA) |
CCRPS |
CRISIL AAA/Stable (Triple A; Outlook: Stable by CRISIL) |
CARE AAA (RPS)/ Stable (Triple A [Redeemable Preference Shares]; Outlook: Stable by CARE) |
||
Commercial Papers |
CRISIL A1 (A One Plus by CRISIL) |
CARE A1 (A One Plus by CARE) |
IND A1 (A One Plus by India Ratings) |
ICRA A1 (A One Plus by ICRA) |
Name of subsidiary company |
Amount of capital subscribed (R in Cr) |
L&T Capital Markets (Middle East) Limited |
2.52 |
⢠Total income was R 191.42 Cr in FY 2020-21 as compared to R 522.38 Cr in FY 2019-20.
⢠Profit before taxes was R 188.79 Cr in FY 2020-21 as compared to R 283.74 Cr in FY 2019-20.
⢠Profit for the year was R 116.05 Cr in FY 2020-21 as compared to R 266.81 Cr in FY 2019-20.
Appropriations
The Company proposes to transfer R 23.21 Cr (previous year R 53.36 Cr) to Special Reserve created u/s 45-IC of the Reserve Bank of India Act, 1934.
The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Companies Act, 2013 ("the Act").
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion & Analysis Report forming part of this Report.
MATERIAL CHANGES AND COMMITMENTS
In FY 2019-20, the Boards of Directors of L&T Finance Limited ("LTF"), L&T Infrastructure Finance Company Limited ("LTIF") and L&T Housing Finance Limited ("LTHF"), the wholly owned subsidiaries of the Company have approved the amalgamation of LTIF and LTHF with LTF by way of merger by absorption under the provisions of Sections 230 - 232 of the Act (including the rules thereunder) and other relevant provisions of the Act. Further, post receipt of the sanction orders from National Company Law Tribunal, Mumbai and National Company Law Tribunal, Kolkata and the approval of the Board of LTF, LTIF and LTHF merged with LTF w.e.f. April 12, 2021.
They were no other material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.
The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the website of the Company at www.ltfs.com/investors.html. (click-Dividend Distribution Policy).
The Board of Directors had declared and paid an interim dividend @ 8.95%, 8.15%, 8.00%, 7.95% (four options), 7.60% and 7.50% (two options) per share on the nine series of Cumulative Compulsorily
Redeemable Non-Convertible Preference Shares ("CCRPS") of face value of R 100 each of the Company, during FY 2020-21, in accordance with the provisions of the respective Information Memoranda entailing an outflow of R 95.96 Cr (excluding Dividend Distribution Tax). For the year ended on March 31,2021, your Company has not considered the proposal to pay dividend, in view of the current challenging times arising on account of COVID-19 pandemic as the focus has been on strengthening the balance sheet and making it more robust.
During the year under review, CRISIL Limited ("CRISIL"), CARE Ratings Limited ("CARE"), India Ratings and Research Private Limited ("India Ratings") and ICRA Limited ("ICRA") have reviewed the ratings on various debt instruments of the Company and reaffirmed the ratings as given below.
The instruments / bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
The instruments with short term ratings of A1 are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
During the year under review, the Board of Directors of the Company issued 46,13,25,021 Equity Shares of face value of R 10 each on rights basis to eligible equity shareholders of the Company who were on the Register of Members as on January 22, 2021, being the record date fixed for the purpose ("Eligible Equity
Shareholders") at an issue price of R 65 per fully paid-up equity share (including a premium of R 55 per equity share). The rights entitlement ratio was 17:74 (i.e. 17 Equity Shares were offered for every 74 shares fully paid-up Equity Shares held by the Eligible Equity Shareholders of the Company).
There has been no deviation in the utilisation of rights issue proceeds from the objects stated in the letter of offer dated January 19, 2021.
Non-Convertible Debentures
During the year under review, the Company issued 1,950 Unsecured, Redeemable, Non-Convertible Debentures ("NCDs") of face value R 10,00,000 each, aggregating to R195 Cr on a private placement basis.
During the year under review, the Company has allotted 46,13,25,021 Equity Shares of face value of R 10 each to the Eligible Equity Shareholders under rights issue at an issue price of R 65 per Equity Share (including premium of R 55 per Equity Share), thereby raising funds aggregating to R 2,998.61 Cr.
Further, the Company has issued 6,84,500 Equity Shares and 26,02,573 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 ("ESOP Scheme") respectively.
Also, 6,00,00,000 CCRPS amounting to R 600 Cr, which were due for redemption were duly redeemed by the Company.
Pursuant to allotment of Equity Shares under Rights issue, ESOP Scheme and subsequent redemption of CCRPS, the paid-up share capital of the Company was R 3,593.55 Cr (including preference share capital of R1,124.10 Cr) as at March 31, 2021 as compared to R 3,728.93 Cr (including preference share capital of R 1,724.10 Cr) as at March 31, 2020.
The disclosures required to be made under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www. ltfs.com/investors.html (click-ESOP Disclosure). The certificate from the Statutory Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
During the year under review, the Company infused capital in its following subsidiaries by subscribing to the Equity/Ordinary Shares offered by them:
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company ("NBFC-CIC") pursuant to the receipt of Certificate of
Registration from the Reserve Bank of India ("RBI") dated September 11, 2013, under
Section 45-IA of the Reserve Bank of India Act, 1934.
STATUTORY DISCLAIMER
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.
The Company being non-deposit taking NBFC-CIC, has not accepted any deposits from the public during the year under review.
The composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.
During the year under review, Mr. Thomas Mathew T. was re-appointed, for a second term of 5 consecutive years with effect from July 1, 2020 to June 30, 2025, as an Independent Director in accordance with the provisions of Sections 149 and 152 of the Act and the appointment was approved by the Members at the Twelfth Annual General Meeting ("AGM") held on July 28, 2020.
The tenure of Mr. Dinanath Dubhashi who was appointed as a Whole-time Director, designated as Deputy Managing Director of the Company, with effect from April 14, 2016 upto and including July 21, 2016 and as Managing Director
for the period July 22, 2016 upto and
including April 13, 2021, on the terms and conditions approved by the Members at their Eighth AGM held on August 23, 2016, was expiring on April 13, 2021.
In views of the aforesaid and pursuant to the
provisions of Sections 196, 197, 203 read with Schedule V of the Act and any other applicable provisions of the Act read with relevant rules made thereunder and based on the recommendation of the Nomination and Remuneration Committee of the Company ("NRC"), the Board at its Meeting held on March 19, 2021 approved the re-appointment of Mr. Dinanath Dubhashi as the Managing Director and Chief Executive Officer of the Company, for another term of five consecutive years i.e., with effect from April 14, 2021 to April 13, 2026, subject to the approval of the Members at the ensuing AGM.
Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. R. Shankar Raman, Non-Executive Director will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
The terms and conditions of appointment of Independent Directors are available on the website of the Company at https://www.ltfs.com/investors.html (click-Appointment of ID).
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/ her ability to discharge his/ her duties with an objective independent judgement and without any external influence.
Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The Company had conducted familiarization programme on ESG Framework for the Board of Directors of the Company. The details relating to the familiarization programme are available on the website
of the Company at www.ltfs.com/investors.html (click-Familiarization Programme).
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI. All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL ("KMPs")
There was no change in the KMPs of the Company during the year under review. As at March 31, 2021, the Company had following KMPs:
1) Mr. Dinanath Dubhashi - Managing Director & Chief Executive Officer ("MD & CEO")
2) Mr. Sachinn Joshi - Chief Financial Officer
3) Ms. Apurva Rathod - Company Secretary
During the year, Mr. Dinanath Dubhashi was re-appointed as MD & CEO and designated as KMP for another term of five years with effect from April 14, 2021 up to April 13, 2026, subject to the approval of the Members at the ensuing AGM.
COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
A. Background and objectives
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, requires the NRC to formulate a policy relating to the remuneration of the Directors, Senior Management / KMPs and other employees of the Company and recommend the same for approval of the Board.
Further, Section 134 of the Act stipulates that the Board''s Report is required to include a statement on the Company''s Policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directors'' appointment and remuneration for Directors, KMP and other employees, which is available on the website of the Company at www.ltfs.com/investors.html (click-Policy on Directors'' Appointment).
B. Brief framework of the Policy
The objective of this Policy is:
a) to determine inter-alia, qualifications, positive attributes and independence of a Director;
b) to guide on matters relating to appointment and
removal of Directors and Senior Management;
c) to lay down criteria / evaluate performance of the Directors;
d) to guide on determination of remuneration of the Directors, Senior Management / KMPs and other employees; and
e) to ensure relationship of remuneration to performance is clear and meets appropriate performance benchmarks.
C. Appointment of Director(s) - Criteria Identification
The NRC identifies and ascertains the integrity, professional qualification, expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his / her appointment.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and rules thereunder and SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and SEBI Listing Regulations, before appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he / she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of Managing Director and Whole-time Director is subject to the provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and rules thereunder. A person shall not occupy the position as a Managing Director / Whole-time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and Senior Management / KMPs / Employees
⢠Independent Directors / Non-Executive Directors
The NRC carries out evaluation of performance of Independent Directors / Non-Executive Directors every year ending March 31st on the basis of the following criteria:
a) Membership & Attendance - Board and Committee Meetings;
b) Contribution during such meetings;
c) Active participation in strategic decision making;
d) Inputs to executive management on matters of strategic importance;
e) Performance of the directors;
f) Fulfillment of the independence criteria and their independence from the management; and
g) Such other matters, as the NRC / Board may determine from time to time.
The NRC carries out evaluation of performance of Executive Directors ("EDs") every year ending March 31st. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of EDs. The identified KPIs for EDs are approved by the Board, pursuant to recommendation of the NRC, if required.
⢠Senior Management / KMPs / Employees
The HR Department carries out the evaluation of the aforementioned persons every year ending March 31st, with the Department Head(s) / Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s) / Management/ Department Head(s) to determine whether the performance benchmarks are achieved. The payment of remuneration / annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorised to design the framework for evaluating the EDs / Senior Management / KMPs / employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during the financial year. Training and Development Orientation programmes on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
The NRC, while determining and / or recommending the criteria for remuneration / remuneration for Directors, Senior Management / KMPs and other employees ensures that:
a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b. relationship of remuneration to performance
is clear and meets appropriate performance benchmarks; and
c. remuneration to Directors, Senior Management / KMPs involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
During the year under review, the Policy was amended to include the retirement age of Executive Director / Managing Director of the Company. Also, the changes required under regulatory provision were carried out to the Policy.
Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors is required to be carried out.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Managing Director and Chief Executive Officer and Chairperson of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
⢠Evaluation of Board as a whole and the Committees is done by the individual directors /members, followed by submission of collation to NRC and feedback to the Board.
b) Independent/ Non-Executive Directors Evaluation:
⢠Evaluation done by Board members excluding the Director being evaluated is submitted to the Chairperson of the Company and individual feedback provided to each Director.
c) Chairperson / Managing Director & Chief
Executive Officer Evaluation:
⢠Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC provides feedback to the NRC and subsequently to the Board.
SUSTAINABILITY REPORT AND BUSINESS RESPONSIBILITY REPORT
The detailed Sustainability Report will be available on the website of the Company at https://www. ltfs.com/csr.html.
The information disclosed in the Sustainability Report is aligned to the Global Reporting Initiative ("GRI") Standards for sustainability reporting. The principles applied for defining contents of the report and quality are as prescribed by the GRI Standards. Additionally, on a voluntary basis the Company has provided cross referencing to Business Responsibility and Sustainability Report ("BRSR") disclosures specified by SEBI in its circular SEBI/HO/CFD/CMD-2/P/ CIR/2021/562 dated May 10, 2021 in its Sustainability Report.
Further, in terms of Regulation 34(2)(f) of the SEBI Listing Regulations the Company is required to submit a Business Responsibility Report ("BRR") as a part of the Annual Report. The Company''s BRR describing the initiatives taken by the Company is hosted on the website of the Company at www.ltfs.com/investors.html
(click-Business Responsibility Report).
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming part of the Annual Report. The certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder, the Members at their Eighth AGM held on August 23, 2016, had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm''s Registration Number 117366W/W-100018) and M/s. B. K. Khare & Co., Chartered Accountants (ICAI Firm''s Registration Number 105102W) as the Joint Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of Eighth AGM till the conclusion of the Thirteenth AGM.
In view of the aforesaid, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants and M/s. B. K. Khare & Co., Chartered Accountants would cease to be the Joint Statutory Auditors of the Company at the conclusion of the ensuing AGM.
In view of the aforesaid, the Board, on the recommendation of the Audit Committee ("AC") recommended the appointment of M/s Khimji Kunverji and Co LLP, Chartered Accountants (ICAI Firm''s Registration Number 105146W/W100621) as the Statutory Auditors of the Company for a term of three years in accordance with the requirements stipulated by the RBI, the Company''s regulator, to hold office from the conclusion of the ensuing AGM i.e. Thirteenth AGM till the conclusion of the Sixteenth AGM, subject to the approval of the Members at the ensuing AGM of the Company.
M/s Khimji Kunverji and Co LLP, Chartered Accountants have confirmed that their appointment, if made, will comply with the eligibility criteria in terms of Section 141(3) of the Act and RBI regulations. Further, the Auditors have confirmed that they have subjected themselves to Peer Review process by the Institute of Chartered Accountants of India ("ICAI") and hold valid certificate issued by the Peer Review Board of ICAI.
The Auditors'' Report to the Members for the year under review is unmodified/ clean. The Notes to the Accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Regulation 24A of the SEBI Listing Regulations, the Company had appointed Ms. Naina R. Desai, Practicing Company Secretary (Membership No.: F1351; Certificate of Practice No.: 13365) to undertake the Secretarial Audit of the Company for FY 2020-21.
Further, in terms of the provisions of the Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 issued by SEBI, Ms. Desai has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI Regulations and circulars / guidelines issued thereunder.
The Secretarial Audit Report is appended as Annexure B to this Report. There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to this Report.
In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said Annexure is available for inspection by the Members.
The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the Policy on Directors'' appointment and remuneration for Directors, KMPs and other employees and is in accordance with the requirements of the Act and SEBI Listing Regulations and none of the employees listed in the said Annexure are related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering that the Company is a Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.
Some of the steps taken by L&T Financial Services ("LTFS") for conservation of energy includes:
- Installation of sensor-based lighting within the office premises which automatically turns the lights off when not in use.
- Set up of variable frequency drives for air handling units and pumps for optimum use of electricity.
- Installation of LED-based energy efficient lighting fixtures in the office premises.
- Installation of a sewage treatment plant for treatment of waste water to be reused for gardening and air conditioning.
There were no foreign exchange earnings during the year (previous year also Nil); while the expenditure in foreign currency by the Company during the year was R 0.69 Cr towards professional fees and nil travelling expenses (previous year R 0.79 Cr and R 0.08 Cr respectively).
The Company''s Equity Shares are compulsorily tradable in electronic form. As on March 31, 2021, out of the Company''s total equity paid-up share capital comprising of 2,46,94,45,704 Equity Shares, only 4,701 Equity Shares were in physical form and the remaining capital is in dematerialized form.
As per SEBI notification no. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide notification no. SEBI/LADNRO/ GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities (except in case of transmission or transposition of securities) cannot be processed from April 1, 2019 unless the securities are held in the dematerialized form with the depositories.
Therefore, Members holding securities in physical form are requested to take necessary action to dematerialize their holdings.
The Company conducts its business through its subsidiaries in various business segments. As of March 31, 2021, the Company had 10 subsidiaries (including step down subsidiaries) and as on the date of this report, the Company had 8 subsidiaries (including step down subsidiaries).
During the year under review, pursuant to a Share Purchase Agreement, the Company completed the sale of its investment in L&T Capital Markets Limited to IIFL Wealth Finance Limited on April 24, 2020 and accordingly, L&T Capital Markets Limited ceased to be a subsidiary of the Company.
During the year under review, the Board of Directors of the Company at their meeting held on July 16, 2020, had approved the proposal to voluntarily winding-up L&T Capital Markets (Middle East) Limited, the wholly owned subsidiary of the Company (carrying on the offshore wealth management business), subject to applicable laws of United Arab Emirates. L&T Capital Markets (Middle East) Limited was voluntarily liquidated with effect from December 17, 2020 post completion of all regulatory requirements and accordingly, ceased to be a subsidiary of the Company.
In FY 2019-20, the Boards of Directors of L&T Finance Limited ("LTF"), L&T Infrastructure Finance Company Limited ("LTIF") and L&T Housing Finance Limited ("LTHF"), the wholly owned subsidiaries of the Company have approved the amalgamation of LTIF and LTHF with LTF by way of merger by absorption under the provisions of Sections 230 - 232 of the Act (including the rules thereunder and other relevant provisions of the Act. Further, post receipt of the sanction orders from National Company Law Tribunal, Mumbai and National Company Law Tribunal, Kolkata and the approval of the Board of LTF, LTIF and LTHF merged with LTF w.e.f. April 12, 2021.
MATERIAL SUBSIDIARIES
As required under Regulations 16(1 )(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the Policy for determining Material Subsidiaries ("Policy"). The details of the
Policy are available on the website of the Company at www.ltfs.com/investors.html (click-Policy for determining Material Subsidiaries)
Further, considering that there is no aggregate net profit for the preceding three financial years calculated pursuant to provisions of Section 135 of the Act, the Company was not required to contribute any amount on CSR activities during FY 2020-21. An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to this Report.
VIGIL MECHANISM
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act, the Company has adopted a Vigil Mechanism Framework, under which the Whistle Blower Investigation Committee ("the Committee") has been set up. The objective of the framework is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which the Directors and employees can raise actual or suspected violations.
The Vigil Mechanism Framework empowers all levels of employees including top management to raise voice against actual/ suspected violations. The implementation of the framework is monitored through the Committee which meets on a quarterly basis and all cases are discussed in detail before it''s presented to the AC. It addresses all concerns raised on questionable practices. The framework ensures protection to the whistle-blower to avoid any sort of unfair or prejudicial employment practices. The Chairperson of the AC has direct access to all complaints raised through the framework.
At the AC, brief update is presented to the Members for their review. The Committee takes necessary actions to maintain confidentiality within the organization on matters brought to its attention.
The mechanism framed by the Company is in compliance with the requirements of the Act and SEBI Listing Regulations and the same is available on the website of the Company at www ltfs.com/investors.html (click-Vigil Mechanism Policy).
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
Details of loans, guarantees and investments are given in the Notes to the Financial Statements, as applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI Regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY / ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to this Report. The highlights of performance of subsidiaries and the contribution by such subsidiaries is given as a part of the Management Discussion & Analysis Report forming part of this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirms that, to the best of its knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws including applicable secretarial standards and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter. The IA function of LTFS monitors and evaluates the efficacy and adequacy of the internal control system in the Company to ensure that financial
reports are reliable, operations are effective and efficient and activities comply with applicable laws and regulations. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the AC of the Company from time to time.
The details of the Board meetings held during FY 2020-21 are disclosed in the Corporate Governance Report appended to this Report.
COMPOSITION OF AUDIT COMMITTEE
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI Regulations. The details of the same are disclosed in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") and ESG Committee. The composition and terms of reference of the CSR and ESG Committee are provided in the Corporate Governance Report.
The Company has also formulated a CSR Policy ("Policy") in accordance with the requirements of the Act and containing details specified therein which is available on the website of the Company at www.ltfs.com/csr. html (click-CSR Policy).
The Policy of the Company is a clear alignment with the United Nations'' global development agenda of Sustainable Development Goals (SDG) particularly ''No Poverty'' (SDG 1), ''Gender equality'' (SDG 5), ''Sustainable cities and Communities'' (SDG 11), ''Climate Action'' (SDG 13) and ''Partnership for the Goals'' (SDG 17). The inclusion of all stakeholders based on a priority matrix is clearly articulated in the Policy and all the programmes are passed through this matrix before being implemented on the ground for creating maximum stakeholder value. Our key initiatives are woven around Sustainable Livelihoods of Rural communities facilitated by focused areas of intervention - Digital Financial Inclusion, Disaster Management and other programmes.
During the year under review, the Policy has been updated as below:
⢠Revision in thrust areas based on Company''s strategy
⢠Amendments as a result of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021
whatever name called from any other financial sector regulators.
ACKNOWLEDGEMENT
The Directors express their sincere gratitude to the RBI, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company''s bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Company''s stakeholders and trust reposed by them in the Company. The Directors sincerely appreciate
the website of the Company at www.ltfs.com/investors. html (click-RPT Policy). The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
⢠All transactions with related parties ("RPTs") are referred to the AC of the Company for approval, irrespective of its materiality. The AC, also approves any subsequent modification in the RPTs. The process of approval of RPTs by the AC, Board and Shareholders is as under:
a) Audit Committee:
All RPTs irrespective of whether they are in the ordinary course of business or at an arm''s length basis require approval of AC.
b) Board:
Generally, all RPTs are in the ordinary course of business and at arm''s length price.
RPTs which are not at arm''s length and which are not in the ordinary course of business are approved by the Board.
All material RPTs require prior approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting. However, approval of the shareholders is not required to be obtained by the Company if the proposed transaction is to be entered into with its wholly owned subsidiaries.
Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by ordinary resolution in the general meeting, it is required to be ratified by the Board or the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.
⢠All RPTs that were entered into during FY 202021 were on an arm''s length basis and were in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to Notes to the Financial Statements which sets out related party disclosures.
The Company has constituted a Risk Management Committee ("RMC") in terms of the requirements of Regulation 21 of the Listing Regulations and has also adopted a Risk Management Policy. The details of the RMC are disclosed in the Corporate Governance Report.
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC is kept apprised of the proceedings of the meetings of the RMC and also apprised about the risk management framework at its subsidiaries. The Company, as it advances towards its business objectives and goals, is often subjected to various risks. Credit risk, market risk, liquidity risk and operational risk are some of the risks that your Company is exposed to and details of the same are provided in the Management Discussion and Analysis Report.
PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Further, the Company has constituted an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where employees can register their complaints against sexual harassment. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
ANNUAL RETURN AS PRESCRIBED UNDER THE ACT
The Annual Return in Form MGT-7 as required under Section 92(3) of the Act is available on the website of the Company at www.ltfs.com/investors.html (click-Annual Return).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
Further, no penalties have been levied by RBI / any other Regulators during the year under review.
The Company has complied with all the applicable regulations of RBI as on March 31, 2021.
During the year under review, the Company has not obtained any registration/ license / authorisation, by
the commitment displayed by the employees of the Company and its subsidiaries across all levels, for exhibiting outstanding performance during such challenging times.
For and on behalf of the Board of Directors L&T Finance Holdings Limited
Shailesh Haribhakti Dinanath Dubhashi
Chairperson Managing Director &
DIN: 00007347 Chief Executive Officer
DIN:03545900
Place: Mumbai Date: June 24, 2021
Mar 31, 2019
Board's Report
Dear Members,
The Directors of your Company have the pleasure in presenting the Eleventh Annual Report together with the audited financial statements for the financial year ("FY") ended March 31, 2019.
FINANCIAL RESULTS
The summary of the Company's financial performance, both on a consolidated and standalone basis, for FY 2018-19 as compared to the previous FY 2017-18 is given below:
 |
 |
(Rs.cr) |
||
Particulars |
Consolidated |
Standalone |
||
 |
2018-19 |
2017-18 |
2018-19 |
2017-18 |
Total income |
13,301.52 |
10,266.26 |
526.48 |
477.82 |
Less: Total expenses |
10,249.54 |
8,820.50 |
222.45 |
185.12 |
Profit before tax |
3,051.98 |
1,445.76 |
304.03 |
292.70 |
Less: Tax expense |
819.95 |
168.24 |
36.97 |
26.65 |
Profit after tax |
2,232.03 |
1,277.52 |
267.06 |
266.05 |
Add: Share in profit of associate company |
- |
0.83 |
- |
- |
Net profit after tax and share in profit of associate company |
2,232.03 |
1,278.35 |
267.06 |
266.05 |
Profit for the year (owners of the Company) |
2,226.30 |
1,254.68 |
267.06 |
266.05 |
Actuarial gain on defined benefit plan (gratuity) net of income tax |
(1.50) |
(0.94) |
(0.32) |
0.62 |
Total comprehensive income for the year (owners of the Company) |
2,224.80 |
1,253.74 |
266.74 |
266.67 |
Add: Balance brought forward from previous year |
1,300.94 |
580.68 |
189.57 |
142.21 |
Balance Available |
3,525.74 |
1,834.42 |
456.31 |
408.88 |
Appropriations |
 |
 |
 |
 |
Dividend paid |
199.71 |
145.74 |
199.70 |
145.74 |
Additional tax on dividend paid |
70.67 |
76.73 |
- |
- |
Transfer to Reserve u/s 45-IC of Reserve Bank of India Act, 1934 |
295.32 |
176.66 |
53.41 |
73.57 |
Transfer to Debenture Redemption Reserve |
62.41 |
48.07 |
- |
- |
Transfer to Reserve u/s 36(1)(viii) of Income Tax Act, 1961 |
114.35 |
85.62 |
- |
- |
Transfer to Reserve u/s 29-C of National Housing Bank Act, 1987 |
11.87 |
0.66 |
- |
- |
Surplus in the Statement of Profit and Loss |
2,771.41 |
1,300.94 |
203.20 |
189.57 |
FINANCIAL PERFORMANCE
Your Company has adopted Indian Accounting Standards ("Ind AS") pursuant to notification dated March 30, 2016 issued by the Ministry of Corporate Affairs ("MCA") and under Section 133 of the Companies Act, 2013 (the "Act") read with the Companies (Indian Accounting Standards) Rules, 2015 from April 1, 2018 and the effective date of such transition is April 1, 2017. Such transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant rules issued thereunder and guidelines issued by the Reserve Bank of India ("RBI") (collectively referred to as the "Previous GAAP"). The figures have been presented in accordance with the format prescribed for financial statements for NBFC whose financial statements are drawn up in compliance with the Companies (Indian Accounting Standards) Rules, 2015, in Division III of Notification No. GSR1022 (E) dated October 11, 2018, issued by MCA.
Being a Core Investment Company, the Company's standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
Consolidated
⢠Total income grew by 29.57% from Rs. 10,266.26 cr in FY 2017-18 to Rs. 13,301.52 cr in FY 2018-19.
⢠Profit before taxes grew from Rs. 1,445.76 cr in FY 2017-18 to Rs. 3,051.68 cr in FY 2018-19.
⢠Profit for the year attributable to owners of the Company also grew from Rs. 1,254.68 cr in FY 2017-18 to Rs. 2,226.30 cr in FY 2018-19.
During the year, the net loan book size grew from Rs. 77,088.34 cr to Rs. 91,324.63 cr reflecting a growth of 18.47%.
The Average Assets Under Management ("AAUM") in the Mutual Fund business stood at Rs. 70,944.36 cr for the quarter ended March 31, 2019 as against Rs. 65,931.65 cr for the quarter ended March 31, 2018, reflecting a growth of around 8%.
The Assets Under Service ("AUS") of the Wealth Management business stood at Rs. 28,164.05 cr for the quarter ended March 31, 2019 as against Rs. 18,353.66 cr for the quarter ended March 31, 2018, reflecting a growth of around 53%.
Standalone
⢠Total income grew by 10.18% from Rs. 477.82 cr in FY 2017-18 to Rs. 526.48 cr in FY 2018-19.
⢠Profit before taxes grew from Rs. 292.70 cr in FY 2017-18 to Rs. 304.03 cr in FY 2018-19.
⢠Profit for the year also grew from Rs. 266.05 cr in FY 2017-18 to Rs. 267.06 cr in FY 2018-19.
Appropriations
The Company proposes to transfer Rs. 53.41 cr (previous year Rs. 73.57 cr) to Special Reserve created u/s 45-IC of the Reserve Bank of India Act, 1934.
The Company is not required to maintain cost records as per the provisions of Section 148(1) of the Act.
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion & Analysis Report forming part of this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.
DIVIDEND
The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the Company's website at https: //www.Itfs.com/investors.html.
The Board of Directors had declared and paid an interim dividend @ 9.00%, 8.50%, 8.35%, 8.15% and 8.95% per share (on a pro rata basis for the issuances made during the year), as applicable, on the five series of Cumulative Compulsorily Redeemable Non-Convertible Preference Shares ("CCRPS") of face value of Rs. 100 each of the Company, during FY 2018-19, entailing an outflow of Rs. 88.60 cr (excluding Dividend Distribution Tax).
The Board of Directors is pleased to recommend a final dividend of Rs. 1 per Equity Share of Rs. 10 each (previous year Rs. 1 per Equity Share) subject to approval of the Members in the ensuing Annual General Meeting ("AGM"). In terms of Ind AS-10, events after the reporting period as notified by the MCA, the proposed dividend of Rs. 199.88 cr is not recognised as liability as on March 31, 2019.
The dividend, if approved at the ensuing AGM, would be paid to those Members whose names appear in the Register of Members / Beneficial Owners maintained by the depositories as stated in Notice of the ensuing AGM.
CREDIT RATING
During the year under review, CARE Ratings Limited ("CARE"), ICRA Limited ("ICRA") and India Ratings and Research Private Limited ("India Ratings") reviewed the ratings on various debt instruments of the Company.
CARE reaffirmed its rating on the Non-Convertible Debentures ("NCD") at "CARE AAA / Stable" (Triple A; Outlook: Stable by CARE) and the rating on CCRPS was reaffirmed at "CARE AAA (RPS) / Stable" (Triple A [Redeemable Preference Shares]; Outlook: Stable by CARE). CARE has also reaffirmed the rating on the commercial papers issued by the Company at "CARE A1 +" (A One Plus by CARE).
ICRA upgraded its ratings on NCDs to"ICRAAAA/ Stable"
(Triple A; Outlook: Stable by ICRA) from "ICRA AA+ / Stable" (Double A Plus; Outlook: Stable by ICRA). ICRA has also reaffirmed the rating on the commercial papers issued by the Company at "ICRAA1+" (A One Plus by ICRA).
India Ratings has reaffirmed its rating on NCDs at "IND AAA / Stable" (Triple A; Outlook: Stable by India Ratings) and a rating of "IND A1+" (A One Plus by India Ratings) to the commercial paper issued by the Company.
The instruments / bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
The instruments with short term ratings of A1+ are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
SHARE CAPITAL
During the year under review, the Company has issued 3,85,800 Equity Shares and 27,49,600 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 ("ESOP Scheme") respectively.
During the year under review, to maintain adequate working capital including redemption of Preference Shares and funding the operation of the Company and that of its subsidiaries, the Company had issued 2,50,00,000 CCRPS of face value Rs. 100 each for cash at par aggregating to Rs. 250 cr on a private placement basis which were subsequently listed on BSE Limited in accordance with the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013.
During the year under review, 2,50,00,000 CCRPS amounting to Rs. 250 cr, which were due for redemption were duly redeemed by the Company.
Pursuant to the allotment of Equity Shares under ESOP Scheme and CCRPS and subsequent redemption of CCRPS, the paid-up share capital of the Company was Rs. 3,033.21 cr (including preference share capital of Rs. 1,034.40 cr) as at March 31, 2019 as compared to Rs. 3,030.08 cr (including preference share capital of Rs. 1,034.40 cr) as at March 31, 2018.
INVESTMENT IN SUBSIDIARIES
During the year under review, the Company has infused capital in its following subsidiaries by subscribing to the Equity Shares offered by them:
Name of the subsidiary company |
Amount of capital subscribed (Rs. Cr) |
L&T Infrastructure Finance Company Limited |
265.39 |
L&T Capital Markets (Middle East) Limited |
5.41 |
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company ("NBFC-CIC") pursuant to the receipt of Certificate of Registration from the RBI dated September 11, 2013, under Section 45-IA of the Reserve Bank of India Act, 1934.
STATUTORY DISCLAIMER
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.
FIXED DEPOSITS
The Company being non-deposit taking NBFC-CIC, has not accepted any deposits from the public during the year under review.
DIRECTORS
The composition of the Board is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report.
During the year under review, Ms. Vaishali Kasture resigned from the Board of Directors due to personal reasons and other commitments and accordingly, ceased to be a Director of the Company with effect from May 29, 2018. Mr. Harsh Mariwala, an Independent Director whose term expired on March 31, 2019, did not seek re-appointment as an Independent Director of the Company due to other commitments and ceased to be an Independent Director effective April 1, 2019.
The Board places on record its appreciation of the valuable services rendered by Ms. Kasture and Mr. Mariwala during their tenure as Independent Directors of the Company.
During the year under review, the Company appointed Dr. (Mrs.) Rajani R. Gupte as an Independent Director in accordance with the provisions of Sections 149, 152 and 161 of the Act and Mr. Prabhakar B. as the Non-Executive Director in accordance with the provisions of Sections 152 and 161 of the Act, with effect from June 28, 2018, pursuant to approval of the Members at the Tenth AGM held on August 28, 2018.
Mr. S. V. Haribhakti and Mr. P. V. Bhide were appointed as Independent Directors of the Company at the Sixth AGM, held on July 24, 2014 for a term of 5 consecutive years, from April 1, 2014 to March 31, 2019. Pursuant to the provisions of Section 149 of the Act read with relevant rules made thereunder, an Independent Director can hold the office for a term of upto 5 consecutive years on the Board of a company, but is eligible for re-appointment on passing of a special resolution by the company, based on the report of evaluation of their performance for another term of upto 5 years. No independent director can hold office for more than two consecutive terms.
Further to the aforesaid and based on the recommendation of the Nomination and Remuneration Committee of the Company ("NRC"), the Board at its Meeting held on March 19, 2019 has approved the re-appointment of Mr. S. V. Haribhakti and Mr. P. V. Bhide as Independent Directors for a second term of upto 5 consecutive years from April 1, 2019 to March 31, 2024, subject to the approval of the shareholders by way of a special resolution, and continuation of Mr. S. V. Haribhakti as the Non-Executive Chairman of the Company.
Section 152 of the Act provides that unless the Articles of Association provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the independent directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation. Accordingly, Mr. R. Shankar Raman, Non-Executive Director will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
The terms and conditions of appointment of Independent Directors are also available on the website of the Company at https://www.Itfs.com finvestors.html.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence, as required pursuant to the provisions of Section 149(7) of the Act, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations and are not disqualified from  continuing/getting appointed as Independent Directors. Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details relating to the familiarization programme are available on the website of the Company at https://www.Itfs. com/investors.html.
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI.
All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL ("KMPs")
There was no change in the KMPs of the Company during the year under review. As at March 31, 2019, the Company had following KMPs:
1) Mr. Dinanath Dubhashi - Managing Director & Chief Executive Officer
2) Mr. Sachinn Joshi - Chief Financial Officer
3) Ms. Apurva Rathod - Company Secretary
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
A. Background and objectives
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, requires the NRC to formulate a policy relating to the remuneration of the Directors, Senior Management / KMPs and other employees of the Company and recommend the same for approval of the Board.
Further, Section 134 of the Act stipulates that the Board's Report is required to include a statement on Company's Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directors' appointment and remuneration for Directors, KMP and other employees, which is available on the website of the Company at https://www.Itfs.com/investors.html.
B. Brief framework of the Policy
The objective of this Policy is:
a) to determine inter-alia, qualifications, positive  attributes and independence of a Director;
b) to guide on matters relating to appointment and removal of Directors and Senior Management;
c) to lay down criteria / evaluate performance of the Directors; and
d) to guide on determination of remuneration of the Directors, Senior Management / KMPs and other employees.
C. Appointment of Director(s) - Criteria Identification
The NRC identifies and ascertains the integrity, professional qualification, expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his/ her appointment.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and rules thereunder and SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and SEBI Listing Regulations, before the appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he / she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of Managing Director and Whole-time Director is subject to the provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and rules thereunder. The NRC ensures that a person does not occupy the position as a Managing Director / Whole-time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and Senior Management / KMPs / Employees
⢠Independent Directors / Non-Executive Directors
The NRC carries out evaluation of performance of Independent Directors / Non-Executive Directors every year ending March 31st on the basis of the following criteria:
a) Membership & Attendance - Board and Committee Meetings;
b) Contribution during such meetings;
c) Active participation in strategic decision making;
d) Inputs to executive management on matters of strategic importance; and
e) Such other matters, as the NRC / Board may determine from time to time.
⢠Executive Directors
The NRC carries out evaluation of performance of Executive Directors (" EDs") every year ending March 31st. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of EDs. The identified KPIs for EDs are approved by the Board, pursuant to recommendation of the NRC, if required.
⢠Senior Management / KMPs / Employees
The HR Department carries out the evaluation of the aforementioned persons every year ending March 31st, with the Department Head(s) / Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s)/Management / Department Head(s) to determine whether the performance benchmarks are achieved. The payment of remuneration / annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorised to design the framework for evaluating the EDs / Senior Management / KMPs / employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during a financial year. Training and Development Orientation programmes on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
E. Criteria for Remuneration
NRC while determining and / or recommending the criteria for remuneration / remuneration for Directors, Senior Management / KMPs and other employees ensure that:
a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c) remuneration to Directors, Senior Management / KMPs involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
During the year under review, the changes as mandated under regulatory provisions have been duly carried out in the Policy.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
Manner of Evaluation
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors has to be made.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Managing Director and Chief Executive Officer and Chairperson of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
⢠Evaluation of Board as a whole and the Committees is done by the individual directors/ members, followed by submission of collation to NRC and feedback to the Board.
b) Independent/Non-Executive Directors Evaluation:
⢠Evaluation done by Board members excluding the Director being evaluated is submitted to the Chairperson of the Company and individual feedback provided to each Director.
c) Chairperson / Managing Director & Chief Executive Officer Evaluation:
⢠Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC provides feedback to the NRC and subsequently to the Board.
EMPLOYEE STOCK OPTION SCHEME
The disclosures required to be made under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www.Itfs.com/investors.html.
The certificate from the Statutory Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
SUSTAINABILITY REPORT AND BUSINESS RESPONSIBILITY REPORT
The Company has issued its first Sustainability Report for FY 2018-19. The information disclosed is aligned to the Global Reporting Initiative's (GRI) Standards for sustainability reporting, and is in accordance with the core option. The principles applied for defining contents of the report and quality are as prescribed by the GRI Standards. The detailed Sustainability Report is available on the website of the Company at https://www.Itfs.com/investors.html.
Further, in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 500 listed entities based on their market capitalisation as on March 31, 2019 are required to submit a Business Responsibility Report ("BRR") as a part of the Annual Report. The Company's BRR describing the initiatives taken by the Company has been hosted on the website of the Company at https://www.Itfs.com/investors.html. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Company at the registered office address.
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming part of the Annual Report. The certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder, the Members at their Eighth AGM held on August 23, 2016, had appointed M/s. B. K. Khare & Co., Chartered Accountants (ICAI Firm's Registration Number 105102W) and M/s. Deloitte Haskins& Sells LLP, Chartered Accountants (ICAI Firm's Registration Number 117366W/W-100018) as the Joint Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of Eighth AGM till the conclusion of the Thirteenth AGM. Joint Statutory Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.
AUDITORS' REPORT
The Auditors' Report to the Members for the year under review does not contain any qualification. The Notes to the Accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed Ms. Naina R. Desai, Practicing Company Secretary to undertake the Secretarial Audit of the Company for FY 2018-19.
Further, in terms of the provisions of the Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 issued by SEBI, Ms. Desai has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI Regulations and circulars /guidelines issued thereunder.
The Secretarial Audit Report is appended as Annexure B to this Report.
There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to this Report.
In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said Annexure is available for inspection by the Members at the registered office of the Company during the business hours on any working day of the Company till the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at the registered office address.
The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the Policy on Directors' appointment and remuneration for Directors, KMPs and other employees and is in accordance with the requirements of the Act and SEBI Listing Regulations and none of the employees listed in the said Annexure are related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering that the Company is a Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.
Some of the steps taken at the group level for conservation of energy includes:
Installation of sensor-based lighting within the office premises which automatically turns the lights off when not in use.
Set up of variable frequency drives for air handling units and pumps for optimum use of electricity.
Installation of LED-based energy efficient lighting fixtures in the office premises.
Installation of a sewage treatment plant for treatment of waste water to be reused for gardening and air conditioning.
There were no foreign exchange earnings during the year (previous year also Nil); while the expenditure in foreign currency by the Company during the year was Rs. 0.30 cr (previous year Rs. 1.47 cr) towards professional fees and travelling expenses.
DEPOSITORY SYSTEM
The Company's Equity Shares are compulsorily tradable in electronic form. As on March 31, 2019, out of the Company's total equity paid-up share capital comprising of 1,99,88,12,360 Equity Shares, only 7,926 Equity Shares were in physical form and the remaining capital is in dematerialized form. As per SEBI Notification No. SEBI/LAD-NRO/GN/2018/24 dated June 8, 2018 and further amendment vide Notification No. SEBI/LAD-NRO/GN/2018/49 dated November 30, 2018, requests for effecting transfer of securities (except in case of transmission or transposition of securities) cannot be processed from April 1, 2019 unless the securities are held in the dematerialized form with the depositories. Therefore, Members are requested to take necessary action to dematerialize their holdings.
SUBSIDIARY COMPANIES
The Company conducts its business through its subsidiaries in the various business segments. As of March 31, 2019, the Company had 12 subsidiaries (including step down subsidiaries).
L&T Capital Markets (Middle East) Limited, wholly owned subsidiary of the Company was incorporated under the Companies Law, Dubai International Financial Centre (DIFC) Law No. 2 of 2009 on July 1, 2018. Dubai Financial Authority Services Authority has granted a license to L&T Capital Markets (Middle East) Limited to operate as an authorized firm w.e.f. December 12, 2018.
MATERIAL SUBSIDIARIES
As required under Regulations 16(1)(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the Policy for determining Material Subsidiaries(" Policy"). The details of the Policy are available on the website of the Company at https://www.Itfs.com /investors.html.
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY / ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to this Report. The highlights of performance of subsidiaries and the contribution by such subsidiaries is given as a part of the Management Discussion & Analysis Report forming part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirms that, to the best of its knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws including applicable secretarial standards and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter.
The IA function of L&T Financial Services Group ("LTFS") monitors and evaluates the efficacy and adequacy of the internal control system in the Company and its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee ("AC") of the Company from time to time.
BOARD MEETINGS
The details of the Board meetings held during FY 2018-19 are disclosed in the Corporate Governance Report appended to this Report.
COMPOSITION OF AUDIT COMMITTEE
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI Regulations. The details of the same are disclosed in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee are provided in the Corporate Governance Report.
The Company has also formulated a CSR Policy ("Policy") in accordance with the requirements of the Act and containing details specified therein which is available on the website of the Company at hftps:/www.Itfs.com/csr.html. During the year under review, the Policy has been updated to include some components within the already approved thrust areas like providing aid to women entrepreneurs, digital financial inclusion and adding of sustainable development goals as per United Nations. An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to this Report.
VIGIL MECHANISM
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act, the Company has adopted a Vigil Mechanism Framework, under which the "Whistle Blower Investigation Committee" ("the Committee") has been set up. The objective of the framework is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which the Directors and employees can raise actual or suspected violations.
The Chief Internal Auditor of LTFS acts as an Ombudsman. The role of Ombudsman is to review the grievance at the initial stage and in case the grievance is material, the same is forwarded to the Committee, for investigation. After investigation, the complaint with investigation report is forwarded to AC / Managing Director / Whole-time Director as the case may be. At the AC, brief update is presented to the Members for their review. The Committee takes necessary actions to maintain confidentiality within the organization on matters brought to its attention.
The mechanism framed by the Company is in compliance with the requirements of the Act and SEBI Listing Regulations and the same is available on the website of the Company at https://www.Itfs.com /investors.html.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
Details of loans, guarantees and investments are given in the Notes to the Financial Statements, as applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI Regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on the Company's website at https://www.ltfs.com/investors.html. The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
⢠All transactions with related parties ("RPTs") are referred to the AC of the Company for approval, irrespective of its materiality. The AC, also approves any subsequent modification in the RPTs. The process of approval of RPTs by the Board and Shareholders is as under:
a) Board:
Generally, all RPTs are in the ordinary course of business and at arm's length price.
RPTs which are not at arm's length and which are not in the ordinary course of business are approved by the Board.
b) Shareholders:
All material RPTs require prior approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting.
Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by ordinary resolution in the general meeting, it is to be ratified by the Board or the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.
The related parties are abstained from voting on such resolutions whether the entity is a related party to the particular transaction or not.
⢠All RPTs that were entered into during FY 2018-19 were on an arm's length basis and were in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to Notes to the Financial Statements which sets out related party disclosures.
RISK MANAGEMENT FRAMEWORK
The Company has constituted a Risk Management Committee ("RMC") in terms of the requirements of Regulation 21 of the SEBI Listing Regulations. The details of the same are disclosed in the Corporate Governance Report.
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC is kept apprised of the proceedings of the meetings of the RMC and also apprised about the risk management framework at subsidiaries.
PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at work place. Further, the Company has constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, where employees can register their complaints against sexual harassment. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
ANNUAL RETURN AS PRESCRIBED UNDER THE ACT AND RULES MADE THEREUNDER
The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act and as prescribed in Rule 12 of the Companies (Management and Administration) Rules, 2014, is enclosed as Annexure F to this Report.
The Annual Return in Form MGT-7 as required under Section 92(3) of the Act shall be hosted on the website of the Company viz. https://www.ltfs.com/investors.html.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
Further, no penalties have been levied by RBI /any other Regulators during the year under review.
RBI REGULATIONS
The Company has complied with all the applicable regulations of RBI as on March 31, 2019.
OTHER DISCLOSURES
During the year under review, except as specified in this Report, the Company has not obtained any registration / license / authorisation, by whatever name called from any other financial sector regulators.
ACKNOWLEDGEMENT
The Directors express their sincere gratitude to the Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company's bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Company's stakeholders and trust reposed by them in the Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company and its subsidiaries across all levels, resulting in successful performance during the year.
For and on behalf of the Board of Directors |
|
S. V. Haribhakti |
Dinanath Dubhashi |
Chairperson |
Managing Director & |
DIN: 00007347 |
Chief Executive Officer |
 |
DIN: 03545900 |
Place: Mumbai |
 |
Date: April 28, 2019 |
 |
ANNEXURE A TO BOARD'S REPORT UDIN: 19039826AAAAAH4846
TO THE MEMBERS OF
L&T FINANCE HOLDINGS LIMITED
INDEPENDENT AUDITORS' CERTIFICATE IN RESPECT OF THE IMPLEMENTATION OF EMPLOYEE STOCK OPTION SCHEMES OF THE COMPANY
1. This certificate is issued in accordance with the terms of our engagement letter reference no. SVP/2018-2019/6685 dated September 05, 2018.
2. We, Deloitte Haskins & Sells LLR Chartered Accountants (Firm Registration Number 117366W/W-100018), the Statutory Auditors of L&T Finance Holdings Limited (the "Company"), pursuant to the requirement of clause 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and amendments thereto (the "Regulations") are required to certify for the year ended March 31, 2019 that the Employee Stock Option Schemes, L&T Finance Holdings Limited ESOP Scheme - 2010 and L&T Finance Holdings Limited ESOP Scheme - 2013 (the "Schemes") have been implemented in accordance with the Regulations and in accordance with the special resolution passed by the Shareholders of the Company at the Extra Ordinary General Meeting held on November 29, 2010 for approval of the L&T Finance Holdings Limited ESOP Scheme 2010; special resolution passed by the shareholders of the Company through Postal Ballot on June 14, 2012 for ratification of L&T Finance Holdings Limited ESOP Scheme - 2010 instituted by the Company prior to the Initial Public Offer and special resolution passed by the shareholders of the Company through Postal Ballot on April 04, 2014 for approval of the L&T Finance Holdings Limited ESOP Scheme 2013 (the "Resolutions").
Managements' Responsibility
3. The Management is responsible for implementation of the Schemes in accordance with the Regulations and Resolutions. This responsibility includes the design, implementation and maintenance of internal control relevant to the implementation of the Schemes in accordance with the Regulations and Resolutions. The Management is also responsible for ensuring compliance with the terms and conditions contained in the Regulations and for providing all relevant information to us in this regard.
Auditor's Responsibility
4. It is our responsibility to provide a certificate on compliance with the Regulations and Resolutions by the Company while implementing the Schemes during the year ended March 31, 2019, based on our examination of the books of accounts and other records of the Company for the year on that date, which been subjected to our audit vide our report dated April 28, 2019.
5. We conducted our examination and obtained the explanations in accordance with the Guidance Note on Reports or Certificates for Special Purposes issued by the Institute of Chartered Accountants of India ("ICAI") and the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 which includes test check and materiality. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.
Criteria and Scope
7. The criteria against which the information is evaluated are the following:
a. the Regulations;
b. the Schemes;
c. the Resolution; and
d. written representation from the Management.
Opinion
8. Based on our examination, as stated above, and according to the information, explanations and representations provided to us by the Management of the Company, in our opinion, the Schemes implemented by the Company are in accordance with the Regulations and the Resolutions.
Restriction on Use
9. This certificate is addressed to and provided to the Members of the Company solely for the purpose of compliance with Clause 13 of the Regulations. This certificate should not be circulated, copied, used /referred to for any other purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing.
 |
For Deloitte Haskins & Sells LLP |
 |
Chartered Accountants |
 |
(Firm's Registration No. 117366W/W-100018) |
 |
Sanjiv V. Pilgaonkar |
 |
Partner |
 |
(Membership No. 39826) |
Mumbai, April 28, 2019 |
 |
UDIN : 19039826AAAAAH4846 |
 |
ANNEXURE B TO BOARD'S REPORT
FORM NO. MR-3 Secretarial Audit Report for the financial year ended March 31, 2019
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
L&T FINANCE HOLDINGS LIMITED
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by L&T FINANCE HOLDINGS LIMITED (hereinafter called the "Company"). Secretarial Audit was conducted in a manner that provided me, a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2019, according to the provisions of:
(i) The Companies Act, 2013 ("the Act") and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 ("SCRA") and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ("SEBI Act"), as applicable:-
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; presently, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; presently (Share Based Employee Benefits) Regulations, 2014;
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
(vi) Other specific business/industry related laws that are applicable to the Company, viz.
NBFC - CIC - The Reserve Bank of India Act, 1934 and all applicable Laws, Rules, Regulations, Guidelines, Circulars, Notifications, etc.
I have also examined compliance with the applicable clauses of the following: i. Secretarial Standards issued by The Institute of Company Secretaries of India;
ii. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time and the Uniform Listing Agreements entered into by the Company with Stock Exchange(s), applicable as follows:
a. Equity Shares listed on BSE Limited and National Stock Exchange of India Limited (NSE);
b. Cumulative Compulsorily Redeemable Non-Convertible Preference Shares listed on BSE Limited.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
I further report that the Board of Directors of the Company as on the date of this report is constituted with 1 Executive Director, 2 Non-Executive Directors, 5 Independent Directors and 1 Investor Director. The Independent Directors are more than 1/3rd of the required Board strength. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members' views are captured and recorded as part of the minutes, in case of dissent.
I further report that, based on review of the compliance mechanism established by the Company and the Compliance Certificates taken on record by the Board of Directors at their meetings, there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period the following events / actions have taken place, having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc., like -
(i) Public/Right/Preferential issue of shares / debentures/sweat equity, etc., viz. - Issue of 2,50,00,000 Cumulative Compulsorily Redeemable Non-Convertible Preference Shares ("CCRPS") of face value Rs. 100 each for cash at par aggregating to Rs. 2,50,00,00,000 on a private placement basis, which were subsequently listed on BSE Limited.
(ii) Redemption / buy-back of securities-Redemption of 2,50,00,000 CCRPS of face value Rs. 100 each aggregating to Rs. 2,50,00,00,000.
(iii) Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013 - NIL. (iv) Merger / amalgamation / reconstruction, etc.- NIL (v) Foreign technical collaborations - NIL. (vi) Other Events
Subscription /acquisition of Equity Shares of the following subsidiary companies of the Company:
Sr. No. |
Name of the Company |
No. of Shares |
1 |
L&T Infrastructure Finance Company Limited |
26,53,86,914 Equity Shares |
2 |
L&T Capital Markets (Middle East) Limited |
750,000 Ordinary Class Shares |
Â
 |
NAINA R DESAI |
 |
Practicing Company Secretary |
Place: Mumbai |
Membership No. 1351 |
Date: April 22, 2019 |
Certificate of Practice No. 13365 |
This report is to be read with our letter of even date which is annexed as Annexure-A and forms an integral part of this report.
Annexure-A
To,
The Members
L&T FINANCE HOLDINGS LIMITED
Our report of even date is to be read along with this letter.
1) Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3) We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4) Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5) The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
6) The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
 |
NAINA R DESAI |
 |
Practicing Company Secretary |
Place: Mumbai |
Membership No. 1351 |
Date: April 22, 2019 |
Certificate of Practice No. 13365 |
ANNUAL REPORT 2018-19 - ANNEXURE C TO BOARD'S REPORT
PARTICULARS OF EMPLOYEES
Information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Sr. No. |
Particulars |
Disclosure |
|
1 |
The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year(1) |
N.A(2) |
|
2 |
The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year(1) |
Managing Director & Chief Executive Officer -14% Chief Financial Officer - 8% Company Secretary - 20% |
|
3 |
The percentage increase in the median remuneration of employees in the financial year. |
11.8% |
|
4 |
The number of permanent employees on the rolls of Company. |
2 |
|
5 |
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification(3) thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. |
Employees other than managerial personnel |
Managerial personnel |
8% |
14% |
||
6 |
Affirmation that the remuneration is as per remuneration policy of the Company. |
We affirm that the remuneration is as per the nomination and remuneration policy of the Company |
(1) For the purpose of determining the ratio of remuneration and percentage increase in remuneration of directors as stipulated in Sr. No. 1 & 2 above, only remuneration of Executive Director is considered.
(2)' Considering that the Company is a Core Investment Company which carries on its business through its underlying subsidiaries and in view of the fact that the Executive Director is entrusted with group level responsibilities, comparing the ratio of the remuneration of the Director to the median remuneration of the employees of the Company would not be meaningful.
(3) Increase in remuneration is after taking into consideration performance of an individual and the Company.
 |
For and on behalf of the Board of Directors |
|
 |
S. V. Haribhakti |
Dinanath Dubhashi |
 |
Chairperson |
Managing Director & |
 |
DIN: 00007347 |
Chief Executive Officer |
 |
 |
DIN: 03545900 |
Place: Mumbai |
 |
 |
Date: April 28, 2019 |
 |
 |
ANNUAL REPORT 2018-19 - ANNEXURE D TO BOARD'S REPORT
Form AOC -I
[Statement pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014] Statement containing salient features of the financial statement of subsidiaries, associate companies and joint ventures
Part - A: Subsidiaries (Rs. Cr) |
||||||||||||
Sr. No. |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
Name of the subsidiary |
L&AT Infrastructure Finance Company Limited |
L&AT Finance Limited |
L&AT Housing Finance Limited |
L&AT Infra Debt Fund Limited |
L&AT Investment Management Limited |
L&AT Mutual Fund Trustee Limited |
L&AT Capital Markets Limited |
L&T Financial Consultants Limited |
L&T Infra Investment Partners Advisory Private Limited |
L&T Infra Investment Partners Trustee Private Limited |
Mudit Cement Private Limited |
L&T Capital Markets (Middle East) Limited (1)' |
Financial year ending on |
March 31, 2019 |
|||||||||||
Currency |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
USD |
Exchange rate on the last day of financial year |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
69.16 |
Date of acquisition |
 |
December 31, 2012 |
October 9, 2012 |
 |
 |
 |
 |
 |
 |
 |
December 27, 2013 |
 |
Share capital |
1,255.30 |
1,599.14 |
165.37 |
490.18 |
251.82 |
0.15 |
52.31 |
18.75 |
5.00 |
0.10 |
2.10 |
5.41 |
Other equity |
2,675.06 |
7,301.29 |
1,366.55 |
571.05 |
275.40 |
1.28 |
30.14 |
48.55 |
6.21 |
(0.05) |
(28.30) |
(3.87) |
Total assets |
28,408.78 |
55,836.72 |
13,095.05 |
8,606.40 |
604.37 |
1.49 |
99.62 |
482.19 |
12.72 |
0.06 |
38.36 |
19.79 |
Total liabilities |
24,478.42 |
46,936.29 |
11,563.14 |
7,545.17 |
77.15 |
0.07 |
17.16 |
414.89 |
1.51 |
0.01 |
64.56 |
18.24 |
Investments |
2,080.54 |
4,684.30 |
1,617.18 |
167.04 |
277.79 |
1.11 |
68.50 |
4.26 |
8.23 |
0.03 |
 |
 |
Turnover |
2,817.18 |
7,182.81 |
1,510.37 |
754.81 |
628.94 |
0.13 |
79.88 |
81.05 |
7.37 |
0.03 |
 |
1.90 |
Profit before taxation |
421.87 |
1,303.08 |
394.04 |
131.66 |
88.35 |
(0.08) |
40.89 |
16.60 |
(5.91) |
0.00 |
(6.25) |
(1.56) |
Provision for taxation |
189.98 |
457.12 |
124.59 |
 |
 |
0.02 |
7.62 |
4.66 |
(1.64) |
(0.00) |
0.63 |
 |
Profit after taxation |
231.89 |
845.96 |
269.45 |
131.66 |
88.35 |
(0.10) |
33.27 |
11.93 |
(4.26) |
0.00 |
(6.88) |
(1.56) |
Proposed dividend |
 |
191.90 |
61.19 |
 |
30.22 |
 |
 |
6.75 |
 |
 |
 |
 |
% of shareholding |
 |
 |
 |
 |
 |
 |
00% |
 |
 |
 |
 |
 |
(1)' Wholly owned subsidiary of the Company incorporated under the Companies Law, Dubai International Financial Centre (DIFC) Law No. 2 of 2009 on July 1, 2018. Name of subsidiaries which are yet to commence operations: Mudit Cement Private Limited
Name of subsidiaries which have been liquidated or sold during the year:
Part - B: Associate and Joint Venture
[Statement pursuant to Section 129(3) of the Companies Art. 2013 related to Associate Company and Joint Venturel
Name of Associate |
Grameen Capital India Private Limited |
1 . Latest audited Balance Sheet Date |
March 31, 2018 |
2. Date on which the Associate was associated |
June 5, 2015 |
3 . Shares of Associate held by the company as at March 31, 2019 |
 |
Number of shares |
21,26,000 |
Amount of equity investment in Associate (Rs. cr) |
2.12 |
Amount of preference investment in Associate (Rs. cr) |
3.87 |
4. Holding % / Description of significant influence |
26% of shareholding |
5. Reason of non consolidation of the associate |
No Significance influence as per IndAS 28 |
6. Networth attributable to Shareholding as per latest Audited Balance Sheet (Rs. cr) |
 |
7. Profit/Loss for the year: |
 |
i. Considered in Consolidation (Rs. cr) |
 |
ii. Not Considered in Consolidation (Rs. cr) |
 |
Name of associates or joint ventures which are yet to commence operations |
- |
Name of associates or joint ventures which have been liquidated or sold during the year |
- |
Â
 |
For and on behalf of board of directors of L&T Finance Holdings Limited |
|
 |
S. V. Haribhakti |
Dinanath Dubhashi |
 |
Chairperson |
Managing Director & Chief Executive Officer |
 |
(DIN: 00007347) |
(DIN: 03545900) |
Place: Mumbai |
Sachinn Joshi |
Apurva Rathod |
Date: April 28, 2019 |
Chief Financial Officer |
Company Secretary |
ANNUAL REPORT 2018-19 - ANNEXURE E TO BOARD'S REPORT
Annual Report on Corporate Social Responsibility ("CSR") [Pursuant to Companies (Corporate Social Responsibility Policy) Rules, 2014]
As required under Section 135(4) of the Companies Act, 2013 and Rule 9 of Companies (Accounts) Rules, 2014, the details with respect to CSR are as follows:
1) A brief outline of the Company's CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes:
L&T Financial Services aspires to bring in inclusive social transformation of the rural communities by nurturing and creating opportunities for sustainable livelihoods. The policy clearly states the organization's core CSR thrust areas as Integrated Water Resource Management and Financial Inclusion. The policy defines the Company's CSR vision with a clear implementation methodology. The CSR Policy has been formulated in accordance with the provisions of Section 135 of the Companies Act, 2013 and is available on the website of the Company at https://www.Itfs.com/csr.html.
2) Composition of the CSR Committee:
The composition of CSR Committee is disclosed in the Corporate Governance Report.
3) Average Net Profit of the Company for the last three financial years: Rs. 34.22 cr.
4) Prescribed CSR expenditure and details of CSR spend during the financial year:
Particulars |
Amount (Rs. cr) |
Prescribed CSR Expenditure |
0.68 |
Amount spent as CSR |
0.68 |
Amount unspent |
 |
5) Manner in which amount spent during the financial year:
(Rs. cr) |
|||||||
Sr. No. |
CSR project or activity identified |
Sector in which project is covered |
Projects or programme coverage |
Amount outlay (budget) project or programme wise |
Amount spent on the projects or programmes. Sub heads: (a) Direct expenditure & (b) Overheads |
Cumulative expenditure upto the reporting period |
Amount spent - Direct or through implementing agencies |
1. |
Integrated Water |
(i) eradicating |
State: |
0.50 |
(a) 0.48 |
0.50 |
Indirect** |
 |
Resource Management (IWRM) Improve the crop yield for the marginalized farmers in the semi-arid regions through Integrated Water Resource Management, reaching to 15,000 farmers from 30 villages of Solapur, Latur, Osmanabad |
extreme hunger and poverty; (iv) ensuring environmental sustainability x) rural development project |
Maharashtra Districts: Solapur, Latur, Osmanabad |
 |
(b) 0.02 |
 |
 |
2. |
Digital Sakhi - |
iii) Promoting |
State: |
0.15 |
(a) 0.14 |
0.15 |
Indirect** |
 |
Maharashtra |
gender equality, |
Maharashtra |
 |
(b) 0.01 |
 |
 |
 |
⢠Interventions of Digital Financial Literacy & Entrepreneurship Development by 100 Digital Sakhis in Maharashtra |
empowering women for reducing inequalities faced by socially and economically |
Districts: Osmanabad, Pune and Solapur |
 |
 |
 |
 |
 |
⢠Inclusion of 1,000 women (micro-entrepreneurs) in digital payments space |
backward groups x) rural development project |
 |
 |
 |
 |
 |
 |
⢠Community reach to 1 lakh rural population in Maharashtra |
 |
 |
 |
 |
 |
 |
3. |
Digital Sakhi -Madhya Pradesh ⢠Interventions of Digital Financial Literacy & Entrepreneurship Development by 100 Digital Sakhis in Madhya Pradesh ⢠Inclusion of 1,000 women (micro-entrepreneurs) in digital payments space ⢠Community reach to 50,000 rural population in Madhya Pradesh |
iii) Promoting gender equality, empowering women for reducing inequalities faced by socially and economically backward groups x) rural development project |
State: Madhya Pradesh District: Dhar and Barwani |
0.02 |
(a) 0.02 (b) 0#' |
0.02 |
Indirect** |
4. |
CSR Administration, NGO capacity building |
Capacity building |
 |
0.01 |
(a) 0.01 (b)- |
0.01 |
Direct* |
Total |
CSR Spend in FY 2018-19 |
 |
 |
0.68 |
0.68 |
0.68 |
 |
Â
* Indicates figures less than Rs. 50,000.
Note:
Direct* = CSR projects/ initiatives directly implemented by the Company.
Indirect** = CSR activities/ projects have been carried out by partnering with several Non-Governmental Organizations/ Charitable Institutions like Action for
Agricultural Renewal in Maharashtra (AFARM) and SEWA Bharat.
6) Responsibility Statement:
The CSR Committee confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and policy of the Company.
 |
S. V. Haribhakti |
Dinanath Dubhashi |
 |
Chairperson |
Managing Director & |
 |
CSR Committee |
Chief Executive Officer |
 |
DIN: 00007347 |
DIN: 03545900 |
Place: Mumbai |
 |
 |
Date: April 28, 2019 |
 |
 |
ANNEXURE F TO BOARD'S REPORT
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2019
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS
i) |
CIN |
L67120MH2008PLC181833 |
ii) |
Registration Date |
May 1, 2008 |
iii) |
Name of the Company |
L&T Finance Holdings Limited |
iv) |
Category/Sub-category of the Company |
Company limited by shares / Indian Non-Government Company |
v) |
Address of the Registered office & contact details |
Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai -400 098, Maharashtra, India. Phone: +91 226212 5000 Fax: +91 226212 5553 E-mail: [email protected] Website: www.ltfs.com |
vi) |
Whether listed company |
Yes |
vii) |
Name, Address & contact details of the Registrar & Transfer Agent, if any. |
M/s. Link Intime India Private Limited C-101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083, Maharashtra, India. Tel: +91 2249186270 Fax: +91 2249186060 E-mail: [email protected] Toll Free: 1800 1027796 |
II. PRINCIPAL BUSINESS ACTIVITY OF THE COMPANY
Sr. No. |
Name & Description of main products/ services |
NIC Code of the Product /service |
% to total turnover of the company |
1 |
Non-Banking Financial Institution -Core Investment Company (NBFC-CIC) |
64200 |
91.57% |
III. PARTICUALRS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sr. No. |
Name & Address of the Company |
CIN/GLN |
Holding/ Subsidiary/ Associate |
% of Shares Held |
Applicable Section |
1 |
Larsen and Toubro Limited L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001 , Maharashtra, India. |
L99999MH1946PLC004768 |
Holding Company |
63.91 |
2(46) |
2 |
L&T Infrastructure Finance Company Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai -400098, Maharashtra, India. |
U67190MH2006PLC299025 |
Subsidiary Company |
100 |
2(87)(ii) |
3 |
L&T Investment Management Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai -400 098, Maharashtra, India. |
U65991MH1996PLC229572 |
Subsidiary Company |
100 |
2(87)(ii) |
4 |
L&T Mutual Fund Trustee Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai -400 098, Maharashtra, India. |
U65993MH1996PLC211198 |
Subsidiary Company |
100 |
2(87)(ii) |
5 |
L&T Financial Consultants Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai-400 098, Maharashtra, India. |
U65100MH2011PLC299024 |
Subsidiary Company |
100 |
2(87)(ii) |
6 |
L&T Housing Finance Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai-400 098, Maharashtra, India. |
U45200MH1994PLC259630 |
Subsidiary Company |
100 |
2(87)(ii) |
7 |
L&T Finance Limited Technopolis, 7th Floor, A - Wing, Plot No. - 4, Block - BP, Sector - V, Salt Lake, Kolkata - 700 091 , West Bengal, India. |
U65910WB1993FLC060810 |
Subsidiary Company |
100 |
2(87)(ii) |
8 |
L&T Capital Markets Limited Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai -400 098, Maharashtra, India. |
U67190MH2013PLC240261 |
Subsidiary Company |
100 |
2(87)(ii) |
9 |
L&T Infra Investment Partners Advisory Private Limited Plot No. 177, Vidyanagari Marg, C.S.T Road, Kalina, Santacruz (East), Mumbai-400 098, Maharashtra, India. |
U67190MH2011PTC218046 |
Subsidiary Company |
100 |
2(87)(ii) |
10 |
L&T Infra Investment Partners Trustee Private Limited Plot No. 177, Vidyanagari Marg, C.S.T Road, Kalina, Santacruz (East), Mumbai-400 098, Maharashtra, India. |
U67190MH2011PTC220896 |
Subsidiary Company |
100 |
2(87)(ii) |
11 |
L&T Infra Debt Fund Limited Plot No. 177, Vidyanagari Marg, C.S.T Road, Kalina, Santacruz (East), Mumbai-400 098, Maharashtra, India. |
L67100MH2013PLC241104 |
Subsidiary Company |
100* |
2(87)(ii) |
12 |
Mudit Cement Private Limited 5th Floor, DCM Building, 16, Barakhamba Road, Cannaught Place, New Delhi - 110 001. |
U26942DL1990PTC041941 |
Subsidiary Company |
100 |
2(87)(ii) |
13 |
L&T Capital Markets (Middle East) Limited Office No. 501-502, Level 5, Liberty House, DIFC, Dubai, United Arab Emirates. |
2908** |
Subsidiary Company |
100 |
2(87)(ii) |
14 |
Grameen Capital India Private Limited 306, A Wing, 3rd Floor, 36 Turner Road, Opp. Tavaa Restaurant, Bandra West, Mumbai - 400 050, Maharashtra, India. |
U65923MH2007PTC168721 |
Associate Company |
26 |
2(6) |
 |
* Company along with its wholly-owned subsidiaries. ** DIFC registration number. |
 |
 |
 |
 |
Â
IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS % OF TOTAL EQUITY)
(i) Category - wise Shareholding :-
Category of Shareholders |
No. of Shares held at the beginning of the year (As on April 1, 2018) |
No. of Shares held at the end of the year (As on March 31, 2019) |
% change during the year* |
||||||
 |
Demat |
Physical |
Total |
% of Total Shares |
Demat |
Physical |
Total |
% of Total Shares |
|
A. Promoters |
 |
 |
 |
 |
 |
 |
 |
 |
 |
(1) Indian |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) Individual/HUF. |
- |
- |
- |
- |
- |
- |
- |
- |
- |
b) Central Govt. |
- |
- |
- |
- |
- |
- |
- |
- |
- |
c) State Govt (s). |
- |
- |
- |
- |
- |
- |
- |
- |
- |
d) Bodies Corporate |
1,27,75,20,203 |
- |
1,27,75,20,203 |
64.01 |
1,27,75,20,203 |
- |
1,27,75,20,203 |
63.91 |
-0.10 |
e) Bank/FI |
- |
- |
- |
- |
- |
- |
- |
- |
- |
f) Any other |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sub-total: (A) (1) |
1,27,75,20,203 |
- |
1,27,75,20,203 |
64.01 |
1,27,75,20,203 |
- |
1,27,75,20,203 |
63.91 |
-0.10 |
(2) Foreign |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) NRIs- Individuals |
- |
- |
- |
- |
- |
- |
- |
- |
- |
b) Other- Individuals |
- |
- |
- |
- |
- |
- |
- |
- |
- |
c) Bodies Corporate |
- |
- |
- |
- |
- |
- |
- |
- |
- |
d) Banks/FI |
- |
- |
- |
- |
- |
- |
- |
- |
- |
e) Any other |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sub-total (A) (2) |
- |
- |
- |
- |
- |
- |
- |
- |
|
Total Shareholding of Promoter (A)=(A)(1)+(A)(2) |
1,27,75,20,203 |
- |
1,27,75,20,203 |
64.01 |
1,27,75,20,203 |
- |
1,27,75,20,203 |
63.91 |
-0.10 |
B. Public Shareholding |
 |
 |
 |
 |
 |
 |
 |
 |
 |
(1) Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) Mutual Funds |
10,43,97,227 |
- |
10,43,97,227 |
5.23 |
4,90,40,817 |
- |
4,90,40,817 |
2.45 |
-2.78 |
b) Banks/FI |
97,57,141 |
- |
97,57,141 |
0.49 |
87,88,514 |
- |
87,88,514 |
0.44 |
-0.05 |
c) Central Govt. |
- |
- |
- |
- |
- |
- |
- |
- |
- |
d) State Govt(s). |
- |
- |
- |
- |
- |
- |
- |
- |
- |
e) Venture Capital Fund |
- |
- |
- |
- |
- |
- |
- |
- |
- |
f) Insurance Companies |
- |
- |
- |
- |
- |
- |
- |
- |
- |
g) Flls/FPIs |
18,35,03,993 |
- |
18,35,03,993 |
9.20 |
22,76,95,268 |
 |
22,76,95,268 |
11.39 |
2.20 |
h) Foreign Venture Capital Funds |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i) Others (specify) |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Alternate Investment Funds |
14,47,478 |
- |
14,47,478 |
0.07 |
13,41,150 |
- |
13,41,150 |
0.07 |
-0.01 |
Sub-total (B)(1): |
29,91,05,839 |
- |
29,91,05,839 |
14.99 |
28,68,65,749 |
 |
28,68,65,749 |
14.35 |
-0.64 |
(2) Non - Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
(a) Bodies corporate |
9,49,07,392 |
- |
9,49,07,392 |
4.76 |
9,06,63,447 |
- |
9,06,63,447 |
4.54 |
-0.22 |
i) Indian |
- |
- |
- |
- |
- |
- |
- |
- |
- |
ii) Overseas |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(b) Individuals |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Individual shareholders holding nominal share capital upto Rs. 1 Lakh |
15,84,79,672 |
20,313 |
15,84,99,985 |
7.94 |
17,42,93,154 |
7,926 |
17,43,01,080 |
8.72 |
0.78 |
ii) Individuals shareholders |
5,32,96,805 |
_ |
5,32,96,805 |
2.67 |
5,42,84,275 |
_ |
5,42,84,275 |
2.79 |
0.05 |
holding nominal share capital |
 |
 |
 |
 |
 |
 |
 |
 |
 |
in excess of Rs. 1 Lakh |
 |
 |
 |
 |
 |
 |
 |
 |
 |
(c) Others (specify) |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Non-Resident Repatriates |
61,10,429 |
- |
61,10,429 |
0.31 |
74,65,009 |
- |
74,65,009 |
0.37 |
0.07 |
ii) Foreign Companies |
9,56,57,961 |
- |
9,56,57,961 |
4.79 |
9,56,57,961 |
- |
9,56,57,961 |
4.79 |
-0.01 |
iii) Foreign Nationals |
2,397 |
- |
2,397 |
- |
1,923 |
- |
1,923 |
- |
- |
iv) Non-Resident Non Repatriates |
18,86,472 |
- |
18,86,472 |
0.09 |
26,23,426 |
- |
26,23,426 |
0.13 |
0.04 |
v) Trusts |
72,65,716 |
- |
72,65,716 |
0.36 |
77,06,845 |
- |
77,06,845 |
0.39 |
0.02 |
vi) Directors & their Relatives & |
14,23,761 |
- |
14,23,761 |
0.07 |
15,82,422 |
- |
15,82,422 |
0.08 |
0.01 |
Friends |
 |
 |
 |
 |
 |
 |
 |
 |
 |
vii) NBFCs registered with RBI |
- |
- |
- |
- |
1,40,020 |
- |
1,40,020 |
0.01 |
0.01 |
Sub-total (B)(2): |
41,90,30,605 |
20,313 |
41,90,50,918 |
21.00 |
43,42,78,462 |
7,926 |
43,42,86,388 |
21.73 |
0.73 |
Total Public Shareholding (B)= |
71,81,36,444 |
20,313 |
71,81,56,757 |
35.99 |
72,12,84,231 |
7,926 |
72,12,92,157 |
36.09 |
0.10 |
(B)(D+(B)(2) |
 |
 |
 |
 |
 |
 |
 |
 |
 |
C. Shares held by Custodian |
- |
- |
- |
- |
- |
- |
- |
- |
- |
for GDRs & ADRs |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Grand Total (A+B+C) |
1,99,56,56,647 |
20,313 |
1,99,56,76,960 |
100.00 |
1,99,88,04,434 |
7,926 |
1,99,88,12,360 |
100.00 |
- |
Â
* After considering increase in paid up share capital of the Company on allotment of shares pursuant to exercise of options granted under ESOP scheme(s). - less than 0.01%
(ii) Shareholding of Promoters
Sr. No |
Shareholder's Name |
Shareholding at the beginning of the year (As on April 1, 2018) |
Shareholding at the end of the year (Ason March 31, 2019) |
% change in share holding during the year |
||||
 |
 |
No of shares |
% of total shares of the company |
% of shares pledged encumbered to total shares |
No of shares |
% of total shares of the company |
% of shares pledged encumbered to total shares |
|
1 |
Larsen and Toubro Limited |
1,27,75,20,203 |
64.01 |
- |
1,27,75,20,203 |
63.91 |
- |
-0.10* |
 |
Total |
1,27,75,20,203 |
64.01 |
- |
1,27,75,20,203 |
63.91 |
- |
-0.10 |
* After considering increase in paid up share capital of the Company on allotment of shares pursuant to exercise of options granted under ESOP scheme(s).
(iii) Change in Promoters' Shareholding
Sr. No. |
Name of the Promoter |
Date |
Shareholding at the beginning of the Year (As on April 1, 2018) |
Cumulative Shareholding during the year (April 1, 2018 to March 31, 2019) |
||
 |
 |
 |
No. of Shares |
% of total shares of the company |
No of shares |
% of total shares of the company |
1 |
Larsen and Toubro Limited |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
1,27,75,20,203 |
64.01 |
- |
- |
 |
At the end of the year |
March 31, 2019 |
- |
- |
1,27,75,20,203 |
63.91* |
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)
Sr. No. |
Name of the Shareholder |
Date* |
Shareholding at the beginning of the year (As on April 1, 2018) |
Cumulative Shareholding during the year (April 1, 2018 to March 31, 2019) |
||
 |
 |
 |
No. of shares |
% of total shares of the Company |
No. of shares |
% of total shares of the Company* |
1 |
BC Asia Growth Investments |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
6,38,20,990 |
3.20 |
 |
 |
 |
At the end of the year |
March 31,2019 |
- |
- |
6,38,20,990 |
3.19 |
2 |
ICICI Prudential Life Insurance |
 |
 |
 |
 |
 |
 |
Company Limited |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
2,51,87,016 |
1.26 |
- |
- |
 |
Purchase |
April 06, 2018 |
16,745 |
- |
2,52,03,761 |
1.26 |
 |
Purchase |
April 13, 2018 |
16,662 |
- |
2,52,20,423 |
1.26 |
 |
Purchase |
April 27, 2018 |
1,90,925 |
0.01 |
2,54,11,348 |
1.27 |
 |
Purchase |
May 04, 2018 |
5,283 |
- |
2,54,16,631 |
1.27 |
 |
Purchase |
May 11, 2018 |
4,20,354 |
0.02 |
2,58,36,985 |
1.29 |
 |
Purchase |
May 18, 2018 |
12,301 |
- |
2,58,49,286 |
1.30 |
 |
Purchase |
May 25, 2018 |
3,32,037 |
0.02 |
2,61,81,323 |
1.31 |
 |
Purchase |
June 01, 2018 |
18,98,178 |
0.10 |
2,80,79,501 |
1.41 |
 |
Purchase |
June 08, 2018 |
9,72,434 |
0.05 |
2,90,51,935 |
1.46 |
 |
Purchase |
June 15, 2018 |
1,21,058 |
0.01 |
2,91,72,993 |
1.46 |
 |
Purchase |
June 22, 2018 |
2,11,185 |
0.01 |
2,93,84,178 |
1.47 |
 |
Purchase |
June 30, 2018 |
5,80,393 |
0.03 |
2,99,64,571 |
1.50 |
 |
Purchase |
July 06, 2018 |
24,11,302 |
0.12 |
3,23,75,873 |
1.62 |
 |
Purchase |
July 13, 2018 |
8,37,743 |
0.04 |
3,32,13,616 |
1.66 |
 |
Purchase |
July 20, 2018 |
8,67,641 |
0.04 |
3,40,81,257 |
1.71 |
 |
Purchase |
July 27, 2018 |
1,93,605 |
0.01 |
3,42,74,862 |
1.72 |
 |
Purchase |
August 03, 2018 |
2,45,447 |
0.01 |
3,45,20,309 |
1.73 |
 |
Purchase |
August 10, 2018 |
3,11,209 |
0.02 |
3,48,31,518 |
1.74 |
 |
Purchase |
August 17, 2018 |
37,908 |
- |
3,48,69,426 |
1.75 |
 |
Purchase |
August 24, 2018 |
1,06,403 |
0.01 |
3,49,75,829 |
1.75 |
 |
Purchase |
August 31, 2018 |
10,03,221 |
0.05 |
3,59,79,050 |
1.80 |
 |
Purchase |
September 07, 2018 |
27,32,777 |
0.14 |
3,87,11,827 |
1.94 |
 |
Purchase |
September 14, 2018 |
26,83,152 |
0.13 |
4,13,94,979 |
2.07 |
 |
Purchase |
September 21, 2018 |
7,41,961 |
0.04 |
4,21,36,940 |
2.11 |
 |
Purchase |
September 29, 2018 |
31,93,524 |
0.16 |
4,53,30,464 |
2.27 |
 |
Purchase |
October 05, 2018 |
30,26,407 |
0.15 |
4,83,56,871 |
2.42 |
 |
Purchase |
October 12, 2018 |
18,02,760 |
0.09 |
5,01,59,631 |
2.51 |
 |
Purchase |
October 19, 2018 |
5,31,275 |
0.03 |
5,06,90,906 |
2.54 |
 |
Sale |
October 26, 2018 |
-11,716 |
- |
5,06,79,190 |
2.54 |
 |
Sale |
November 02, 2018 |
-9,962 |
- |
5,06,69,228 |
2.54 |
 |
Purchase |
November 09, 2018 |
15,27,982 |
0.08 |
5,21,97,210 |
2.61 |
 |
Sale |
November 23, 2018 |
-48,885 |
- |
5,21,48,325 |
2.61 |
 |
Sale |
November 30, 2018 |
-15,05,374 |
-0.08 |
5,06,42,951 |
2.54 |
 |
Sale |
December 07, 2018 |
-3,86,392 |
-0.02 |
5,02,56,559 |
2.52 |
 |
Sale |
December 14, 2018 |
-6,52,299 |
-0.03 |
4,96,04,260 |
2.48 |
 |
Sale |
December 21, 2018 |
-1,31,195 |
-0.01 |
4,94,73,065 |
2.48 |
 |
Sale |
December 28, 2018 |
-1,70,756 |
-0.01 |
4,93,02,309 |
2.47 |
 |
Sale |
December 31, 2018 |
-91,415 |
- |
4,92,10,894 |
2.46 |
 |
Purchase |
January 04, 2019 |
3,12,296 |
0.02 |
4,95,23,190 |
2.48 |
 |
Purchase |
January 11, 2019 |
59,249 |
- |
4,95,82,439 |
2.48 |
 |
Sale |
January 18, 2019 |
-2,88,239 |
-0.01 |
4,92,94,200 |
2.47 |
 |
Sale |
January 25, 2019 |
-6,66,362 |
-0.03 |
4,86,27,838 |
2.43 |
 |
Purchase |
February 01, 2019 |
54,946 |
- |
4,86,82,784 |
2.44 |
 |
Purchase |
February 08, 2019 |
68,111 |
- |
4,87,50,895 |
2.44 |
 |
Purchase |
February 15, 2019 |
27,374 |
- |
4,87,78,269 |
2.44 |
 |
Purchase |
February 22, 2019 |
74,387 |
- |
4,88,52,656 |
2.44 |
 |
Purchase |
March 01, 2019 |
38,139 |
- |
4,88,90,795 |
2.45 |
 |
Purchase |
March 08, 2019 |
10,36,922 |
0.05 |
4,99,27,717 |
2.50 |
 |
Purchase |
March 15, 2019 |
38,33,390 |
0.19 |
5,37,61,107 |
2.69 |
 |
Purchase |
March 22, 2019 |
17,72,604 |
0.09 |
5,55,33,711 |
2.78 |
 |
Purchase |
March 29, 2019 |
38,03,596 |
0.19 |
5,93,37,307 |
2.97 |
 |
At the end of the year |
 |
- |
- |
5,93,37,307 |
2.97 |
3 |
Citigroup Global Markets Mauritius Private Limited |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
5,83,11,354 |
2.92 |
- |
- |
 |
Sale |
April 13, 2018 |
-2,00,000 |
-0.01 |
5,81,11,354 |
2.91 |
 |
Sale |
June 08, 2018 |
-2,07,068 |
-0.01 |
5,79,04,286 |
2.90 |
 |
Sale |
June 30, 2018 |
-34,294 |
- |
5,78,69,992 |
2.90 |
 |
Purchase |
January 11, 2019 |
2,08,338 |
0.01 |
5,80,78,330 |
2.91 |
 |
Sale |
February 15, 2019 |
-2,08,338 |
-0.01 |
5,78,69,992 |
2.90 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
5,78,69,992 |
2.90 |
4 |
Smallcap World Fund, Inc |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
 |
 |
 |
 |
Purchase |
November 30, 2018 |
61,72,552 |
0.31 |
61,72,552 |
0.31 |
 |
Purchase |
December 07, 2018 |
1,01,54,758 |
0.51 |
1,63,27,310 |
0.82 |
 |
Purchase |
December 14, 2018 |
76,62,580 |
0.38 |
2,39,89,890 |
1.20 |
 |
Purchase |
January 11, 2019 |
14,60,463 |
0.07 |
2,54,50,353 |
1.27 |
 |
Purchase |
March 08, 2019 |
24,38,939 |
0.12 |
2,78,89,292 |
1.40 |
 |
Purchase |
March 15, 2019 |
33,62,473 |
0.17 |
3,12,51,765 |
1.56 |
 |
Purchase |
March 22, 2019 |
41,21,669 |
0.21 |
3,53,73,434 |
1.77 |
 |
Purchase |
March 29, 2019 |
8,03,419 |
0.04 |
3,61,76,853 |
1.81 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
3,61,76,853 |
1.81 |
5 |
Aditya Birla Sun Life Trustee Private Limited A/C Aditya Birla Sun Life Frontline Equity Fund |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
6,25,47,292 |
3.13 |
 |
 |
 |
Sale |
April 06, 2018 |
-4,00,000 |
-0.02 |
6,21,47,292 |
3.11 |
 |
Sale |
April 13, 2018 |
-11,98,834 |
-0.06 |
6,09,48,458 |
3.05 |
 |
Sale |
April 20, 2018 |
-2,79,000 |
-0.01 |
6,06,69,458 |
3.04 |
 |
Sale |
April 27, 2018 |
-26,917 |
- |
6,06,42,541 |
3.04 |
 |
Sale |
May 18, 2018 |
-5,00,000 |
-0.03 |
6,01,42,541 |
3.01 |
 |
Sale |
May 25, 2018 |
-20,27,000 |
-0.10 |
5,81,15,541 |
2.91 |
 |
Sale |
June 01, 2018 |
-3,50,000 |
-0.02 |
5,77,65,541 |
2.89 |
 |
Sale |
June 08, 2018 |
-54,768 |
- |
5,77,10,773 |
2.89 |
 |
Sale |
June 15, 2018 |
-3,50,000 |
-0.02 |
5,73,60,773 |
2.87 |
 |
Purchase |
June 30, 2018 |
1,50,000 |
0.01 |
5,75,10,773 |
2.88 |
 |
Purchase |
July 06, 2018 |
6,73,000 |
0.03 |
5,81,83,773 |
2.92 |
 |
Purchase |
July 20, 2018 |
77,500 |
- |
5,82,61,273 |
2.92 |
 |
Purchase |
July 27, 2018 |
6,90,000 |
0.03 |
5,89,51,273 |
2.95 |
 |
Sale |
August 10, 2018 |
-5,34,400 |
-0.03 |
5,84,16,873 |
2.93 |
 |
Sale |
August 24, 2018 |
-12,65,600 |
-0.06 |
5,71,51,273 |
2.86 |
 |
Sale |
August 31, 2018 |
-9,00,000 |
-0.05 |
5,62,51,273 |
2.82 |
 |
Sale |
September 07, 2018 |
-10,34,083 |
-0.05 |
5,52,17,190 |
2.76 |
 |
Sale |
September 14, 2018 |
-11,48,000 |
-0.06 |
5,40,69,190 |
2.71 |
 |
Sale |
September 21, 2018 |
-43,81,349 |
-0.22 |
4,96,87,841 |
2.49 |
 |
Sale |
September 29, 2018 |
-19,36,776 |
-0.10 |
4,77,51,065 |
2.39 |
 |
Sale |
October 05, 2018 |
-18,46,100 |
-0.09 |
4,59,04,965 |
2.30 |
 |
Sale |
October 12, 2018 |
-12,97,000 |
-0.06 |
4,46,07,965 |
2.23 |
 |
Sale |
October 19, 2018 |
-2,62,000 |
-0.01 |
4,43,45,965 |
2.22 |
 |
Purchase |
October 26, 2018 |
20,88,000 |
0.10 |
4,64,33,965 |
2.32 |
 |
Sale |
November 02, 2018 |
-8,94,500 |
-0.04 |
4,55,39,465 |
2.28 |
 |
Purchase |
November 09, 2018 |
25,30,000 |
0.13 |
4,80,69,465 |
2.41 |
 |
Purchase |
November 16, 2018 |
13,00,000 |
0.07 |
4,93,69,465 |
2.47 |
 |
Purchase |
November 23, 2018 |
50,000 |
- |
4,94,19,465 |
2.47 |
 |
Sale |
November 30, 2018 |
-7,78,500 |
-0.04 |
4,86,40,965 |
2.44 |
 |
Sale |
December 07, 2018 |
-21,51,000 |
-0.11 |
4,64,89,965 |
2.33 |
 |
Sale |
December 14, 2018 |
-10,58,484 |
-0.05 |
4,54,31,481 |
2.27 |
 |
Purchase |
December 21, 2018 |
7,32,897 |
0.04 |
4,61,64,378 |
2.31 |
 |
Sale |
December 28, 2018 |
-11,38,960 |
-0.06 |
4,50,25,418 |
2.25 |
 |
Sale |
January 04, 2019 |
-16,21,100 |
-0.08 |
4,34,04,318 |
2.17 |
 |
Sale |
January 11, 2019 |
-25,08,822 |
-0.13 |
4,08,95,496 |
2.05 |
 |
Sale |
January 18, 2019 |
-12,60,500 |
-0.06 |
3,96,34,996 |
1.98 |
 |
Sale |
January 25, 2019 |
-7,11,000 |
-0.04 |
3,89,23,996 |
1.95 |
 |
Purchase |
February 01, 2019 |
13,73,000 |
0.07 |
4,02,96,996 |
2.02 |
 |
Sale |
February 08, 2019 |
-7,16,900 |
-0.04 |
3,95,80,096 |
1.98 |
 |
Sale |
February 15, 2019 |
-5,02,000 |
-0.03 |
3,90,78,096 |
1.96 |
 |
Purchase |
February 22, 2019 |
2,30,500 |
0.01 |
3,93,08,596 |
1.97 |
 |
Purchase |
March 01, 2019 |
11,046 |
- |
3,93,19,642 |
1.97 |
 |
Purchase |
March 08, 2019 |
2,49,488 |
0.01 |
3,95,69,130 |
1.98 |
 |
Sale |
March 15, 2019 |
-29,99,211 |
-0.15 |
3,65,69,919 |
1.83 |
 |
Sale |
March 22, 2019 |
-16,43,000 |
-0.08 |
3,49,26,919 |
1.75 |
 |
Sale |
March 29, 2019 |
-30,80,678 |
-0.15 |
3,18,46,241 |
1.59 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
3,18,46,241 |
1.59 |
6 |
BC Investments VI Limited |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
3,18,36,971 |
1.60 |
 |
 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
3,18,36,971 |
1.59 |
7 |
East Bridge Capital Master Fund I Ltd |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
N.A. |
- |
- |
 |
Purchase |
October 05, 2018 |
32,38,663 |
0.16 |
32,38,663 |
0.16 |
 |
Purchase |
October 12, 2018 |
73,45,353 |
0.37 |
1,05,84,016 |
0.53 |
 |
Purchase |
January 18, 2019 |
6,14,010 |
0.03 |
1,11,98,026 |
0.56 |
 |
Purchase |
January 25, 2019 |
4,58,000 |
0.02 |
1,16,56,026 |
0.58 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
1,16,56,026 |
0.58 |
8 |
ITPL - Invesco India Contra Fund |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
31,79,084 |
0.16 |
- |
- |
 |
Purchase |
April 06, 2018 |
3,53,104 |
0.02 |
35,32,188 |
0.18 |
 |
Purchase |
April 13, 2018 |
7,06,741 |
0.04 |
42,38,929 |
0.21 |
 |
Purchase |
April 20, 2018 |
1,92,524 |
0.01 |
44,31,453 |
0.22 |
 |
Purchase |
April 27, 2018 |
4,40,782 |
0.02 |
48,72,235 |
0.24 |
 |
Purchase |
May 04, 2018 |
1,63,099 |
0.01 |
50,35,334 |
0.25 |
 |
Purchase |
May 11, 2018 |
17,17,317 |
0.09 |
67,52,651 |
0.34 |
 |
Purchase |
May 18, 2018 |
54,456 |
- |
68,07,107 |
0.34 |
 |
Purchase |
May 25, 2018 |
29,710 |
- |
68,36,817 |
0.34 |
 |
Purchase |
June 22, 2018 |
14,25,714 |
0.07 |
82,62,531 |
0.41 |
 |
Purchase |
June 30 2018 |
71,808 |
- |
83,34,339 |
0.42 |
 |
Purchase |
July 06, 2018 |
1,57,316 |
0.01 |
84,91,655 |
0.43 |
 |
Purchase |
July 13, 2018 |
5,12,029 |
0.03 |
90,03,684 |
0.45 |
 |
Purchase |
July 20, 2018 |
2,16,051 |
0.01 |
92,19,735 |
0.46 |
 |
Purchase |
July 27, 2018 |
1,20,087 |
0.01 |
93,39,822 |
0.47 |
 |
Purchase |
August 24, 2018 |
2,09,351 |
0.01 |
95,49,173 |
0.48 |
 |
Purchase |
August 31, 2018 |
3,60,809 |
0.02 |
99,09,982 |
0.50 |
 |
Sale |
September 07, 2018 |
-7,76,150 |
-0.04 |
91,33,832 |
0.46 |
 |
Purchase |
September 14, 2018 |
3,94,297 |
0.02 |
95,28,129 |
0.48 |
 |
Purchase |
September 21, 2018 |
5,60,119 |
0.03 |
1,00,88,248 |
0.51 |
 |
Purchase |
September 29, 2018 |
4,20,944 |
0.02 |
1,05,09,192 |
0.53 |
 |
Purchase |
October 05, 2018 |
4,33,718 |
0.02 |
1,09,42,910 |
0.55 |
 |
Purchase |
October 12, 2018 |
2,36,041 |
0.01 |
1,11,78,951 |
0.56 |
 |
Purchase |
October 19, 2018 |
2,54,197 |
0.01 |
1,14,33,148 |
0.57 |
 |
Sale |
October 26, 2018 |
-34,37,001 |
-0.17 |
79,96,147 |
0.40 |
 |
Purchase |
November 02, 2018 |
2,29,616 |
0.01 |
82,25,763 |
0.41 |
 |
Sale |
November 09, 2018 |
-1,94,855 |
-0.01 |
80,30,908 |
0.40 |
 |
Purchase |
December 07, 2018 |
7,526 |
- |
80,38,434 |
0.40 |
 |
Purchase |
December 21, 2018 |
57,870 |
- |
80,96,304 |
0.41 |
 |
Sale |
December 28, 2018 |
-4,03,435 |
-0.02 |
76,92,869 |
0.39 |
 |
Sale |
December 31, 2018 |
-1,97,771 |
-0.01 |
74,95,098 |
0.38 |
 |
Purchase |
January 04, 2019 |
32,764 |
- |
75,27,862 |
0.38 |
 |
Sale |
January 11, 2019 |
-2,63,913 |
-0.01 |
72,63,949 |
0.36 |
 |
Purchase |
February 01, 2019 |
1,06,775 |
0.01 |
73,70,724 |
0.37 |
 |
Purchase |
February 15, 2019 |
1,11,010 |
0.01 |
74,81,734 |
0.37 |
 |
Purchase |
March 01, 2019 |
30,901 |
- |
75,12,635 |
0.38 |
 |
Purchase |
March 08, 2019 |
30,394 |
- |
75,43,029 |
0.38 |
 |
Purchase |
March 15, 2019 |
6,38,328 |
0.03 |
81,81,357 |
0.41 |
 |
Purchase |
March 22, 2019 |
2,81,815 |
0.01 |
84,63,172 |
0.42 |
 |
Purchase |
March 29, 2019 |
71,215 |
- |
85,34,387 |
0.43 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
85,34,387 |
0.43 |
9 |
Vanguard Total International Stock Index Fund |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
58,65,356 |
0.29 |
- |
- |
 |
Purchase |
June 08, 2018 |
4,43,878 |
0.02 |
63,09,234 |
0.32 |
 |
Purchase |
June 22, 2018 |
3,04,835 |
0.02 |
66,14,069 |
0.33 |
 |
Purchase |
July 20, 2018 |
3,73,553 |
0.02 |
69,87,622 |
0.35 |
 |
Purchase |
November 16, 2018 |
3,48,057 |
0.02 |
73,35,679 |
0.37 |
 |
Purchase |
March 01, 2019 |
3,93,957 |
0.02 |
77,29,636 |
0.39 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
77,29,636 |
0.39 |
10 |
Matthews Emerging Asia Fund |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
N.A. |
- |
- |
 |
Purchase |
January 25, 2019 |
42,56,869 |
0.21 |
42,56,869 |
0.21 |
 |
Purchase |
February 01, 2019 |
15,43,256 |
0.08 |
58,00,125 |
0.29 |
 |
Purchase |
February 22, 2019 |
17,25,879 |
0.09 |
75,26,004 |
0.38 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
75,26,004 |
0.38 |
11 |
Vanguard Emerging Markets Stock Index Fund, A Series of |
 |
 |
 |
 |
 |
 |
Vanguard International Equity Index Funds |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01,2018 |
70,40,143 |
0.35 |
- |
- |
 |
Sale |
May 04, 2018 |
-12,700 |
- |
70,27,443 |
0.35 |
 |
Sale |
May 11, 2018 |
-12,065 |
- |
70,15,378 |
0.35 |
 |
Sale |
June 01, 2018 |
-9,525 |
- |
70,05,853 |
0.35 |
 |
Sale |
June 15, 2018 |
-9,525 |
- |
69,96,328 |
0.35 |
 |
Sale |
June 22, 2018 |
-30,053 |
- |
69,66,275 |
0.35 |
 |
Sale |
June 30, 2018 |
-48,378 |
- |
69,17,897 |
0.35 |
 |
Sale |
July 06, 2018 |
-19,791 |
- |
68,98,106 |
0.35 |
 |
Sale |
July 13, 2018 |
-31,519 |
- |
68,66,587 |
0.34 |
 |
Purchase |
November 16, 2018 |
13,125 |
- |
68,79,712 |
0.34 |
 |
Purchase |
November 23, 2018 |
34,125 |
- |
69,13,837 |
0.35 |
 |
Purchase |
December 07, 2018 |
16,625 |
- |
69,30,462 |
0.35 |
 |
Purchase |
December 21, 2018 |
47,250 |
- |
69,77,712 |
0.35 |
 |
Purchase |
February 01, 2019 |
44,370 |
- |
70,22,082 |
0.35 |
 |
Purchase |
February 08, 2019 |
1,41,525 |
0.01 |
71,63,607 |
0.36 |
 |
Purchase |
March 29, 2019 |
17,595 |
- |
71,81,202 |
0.36 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
71,81,202 |
0.36 |
12 |
Morgan Stanley India Investment Fund, Inc. |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
81,10,331 |
0.41 |
 |
 |
 |
Sale |
July 13, 2018 |
-3,78,885 |
-0.02 |
77,31,446 |
0.39 |
 |
Purchase |
October 05, 2018 |
4,460 |
- |
77,35,906 |
0.39 |
 |
Purchase |
October 12, 2018 |
1,88,758 |
0.01 |
79,24,664 |
0.40 |
 |
Sale |
November 09, 2018 |
-12,72,849 |
-0.06 |
66,51,815 |
0.33 |
 |
Sale |
January 18, 2019 |
-5,75,388 |
-0.03 |
60,76,427 |
0.30 |
 |
Sale |
January 25, 2019 |
-1,81,798 |
-0.01 |
58,94,629 |
0.29 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
58,94,629 |
0.29 |
13 |
Morgan Stanley Investment Funds Indian Equity Fund |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
1,13,51,419 |
0.57 |
- |
- |
 |
Purchase |
April 27, 2018 |
7,60,592 |
0.04 |
1,21,12,011 |
0.61 |
 |
Sale |
June 01, 2018 |
-4,65,442 |
-0.02 |
1,16,46,569 |
0.58 |
 |
Sale |
June 08, 2018 |
-13,37,409 |
-0.07 |
1,03,09,160 |
0.52 |
 |
Sale |
June 30, 2018 |
-7,37,383 |
-0.04 |
95,71,777 |
0.48 |
 |
Sale |
July 06, 2018 |
-6,53,089 |
-0.03 |
89,18,688 |
0.45 |
 |
Sale |
July 13, 2018 |
-9,53,349 |
-0.05 |
79,65,339 |
0.40 |
 |
Sale |
July 20, 2018 |
-7,67,062 |
-0.04 |
71,98,277 |
0.36 |
 |
Purchase |
September 29, 2018 |
9,879 |
- |
72,08,156 |
0.36 |
 |
Sale |
October 05, 2018 |
-18,28,555 |
-0.09 |
53,79,601 |
0.27 |
 |
Sale |
October 12, 2018 |
-16,43,515 |
-0.08 |
37,36,086 |
0.19 |
 |
Sale |
January 04, 2019 |
-2,19,530 |
-0.01 |
35,16,556 |
0.18 |
 |
Sale |
February 01, 2019 |
-5,27,483 |
-0.03 |
29,89,073 |
0.15 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
29,89,073 |
0.15 |
14 |
HDFC Life Insurance Company Limited |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
1,06,82,478 |
0.54 |
- |
- |
 |
Purchase |
April 06, 2018 |
1,70,000 |
0.01 |
1,08,52,478 |
0.54 |
 |
Sale |
April 13, 2018 |
-4,891 |
- |
1,08,47,587 |
0.54 |
 |
Purchase |
April 20, 2018 |
34,741 |
- |
1,08,82,328 |
0.55 |
 |
Sale |
May 11, 2018 |
-2,34,355 |
-0.01 |
1,06,47,973 |
0.53 |
 |
Sale |
May 18, 2018 |
-3,064 |
- |
1,06,44,909 |
0.53 |
 |
Sale |
June 01, 2018 |
-16,145 |
- |
1,06,28,764 |
0.53 |
 |
Purchase |
June 30, 2018 |
2,00,000 |
0.01 |
1,08,28,764 |
0.54 |
 |
Purchase |
July 06, 2018 |
2,50,000 |
0.01 |
1,10,78,764 |
0.56 |
 |
Purchase |
July 20, 2018 |
2,46,298 |
0.01 |
1,13,25,062 |
0.57 |
 |
Sale |
July 27, 2018 |
-45,63,412 |
-0.23 |
67,61,650 |
0.34 |
 |
Sale |
August 03, 2018 |
-34,28,702 |
-0.17 |
33,32,948 |
0.17 |
 |
Sale |
August 10, 2018 |
-30,04,305 |
-0.15 |
3,28,643 |
0.02 |
 |
Sale |
August 31, 2018 |
-1,220 |
- |
3,27,423 |
0.02 |
 |
Purchase |
October 05, 2018 |
1,538 |
- |
3,28,961 |
0.02 |
 |
Purchase |
October 12, 2018 |
159 |
- |
3,29,120 |
0.02 |
 |
Purchase |
October 19, 2018 |
95 |
- |
3,29,215 |
0.02 |
 |
Purchase |
October 26, 2018 |
681 |
- |
3,29,896 |
0.02 |
 |
Purchase |
November 02, 2018 |
605 |
- |
3,30,501 |
0.02 |
 |
Purchase |
November 16, 2018 |
400 |
- |
3,30,901 |
0.02 |
 |
Purchase |
November 23, 2018 |
110 |
- |
3,31,011 |
0.02 |
 |
Sale |
November 30, 2018 |
-2,688 |
- |
3,28,323 |
0.02 |
 |
Purchase |
December 07, 2018 |
33,952 |
- |
3,62,275 |
0.02 |
 |
Purchase |
December 14, 2018 |
67 |
- |
3,62,342 |
0.02 |
 |
Purchase |
December 21, 2018 |
9 |
- |
3,62,351 |
0.02 |
 |
Purchase |
December 28, 2018 |
9 |
- |
3,62,360 |
0.02 |
 |
Purchase |
January 11, 2019 |
2,634 |
- |
3,64,994 |
0.02 |
 |
Sale |
January 18, 2019 |
-1,048 |
- |
3,63,946 |
0.02 |
 |
Sale |
February 08, 2019 |
-10,527 |
- |
3,53,419 |
0.02 |
 |
Sale |
March 08, 2019 |
-1,245 |
- |
3,52,174 |
0.02 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
3,52,174 |
0.02 |
15 |
Prazim Trading and Investment Co. Pvt. Ltd. |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
1,30,63,722 |
0.65 |
- |
- |
 |
Sale |
Jun 08, 2018 |
-44,15,000 |
-0.22 |
86,48,722 |
0.43 |
 |
Sale |
June 30, 2018 |
-41,47,327 |
-0.21 |
45,01,395 |
0.23 |
 |
Sale |
July 06, 2018 |
-45,01,395 |
-0.23 |
Nil |
NA |
 |
At the end of the year |
March 31, 2019 |
- |
- |
Nil |
NA |
Â
Â
Â
Â
Â
Note: All figures rounded off upto two decimals
* After considering increase in paid up share capital of the Company on allotment of shares pursuant to exercise of options granted under ESOP scheme(s).
# As stated in the beneficiary position data of Depositories.
- less than 0.01 %
(v) Shareholding of Directors and Key Managerial Personnel (KMP)
Sr. No. |
Name of Director/KMP |
Date |
Shareholding at the beginning of the year (As on April 1, 2018) |
Cumulative Shareholding during the year (April 1, 2018 to March 31, 2019) |
||
 |
No. of shares |
% of total shares of the Company |
No. of shares |
% of total shares of the Company* |
||
1 |
Mr. S. V. Haribhakti (Chairperson) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
2,00,000 |
0.01 |
- |
- |
 |
Purchase |
September 07, 2018 |
2,00,000 |
0.01 |
4,00,000 |
0.02 |
 |
Purchase |
September 25, 2018 |
1,00,000 |
0.01 |
5,00,000 |
0.03 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
5,00,000 |
0.03 |
2 |
Mr. Dinanath Dubhashi |
 |
 |
 |
 |
 |
 |
(Managing Director & Chief Executive Officer) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
7,86,087 |
0.04 |
 |
 |
 |
Sale |
May 14, 2018 |
-1,00,000 |
-0.01 |
6,86,087 |
0.03 |
 |
Sale |
July 25, 2018 |
-1,00,000 |
-0.01 |
5,86,087 |
0.03 |
 |
Sale |
August 01, 2018 |
-1,00,000 |
-0.01 |
4,86,087 |
0.02 |
 |
Sale |
December 04, 2018 |
-1,45,000 |
-0.01 |
3,41,087 |
0.02 |
 |
Sale |
December 04, 2018 |
-55,000 |
- |
2,86,087 |
0.01 |
 |
ESOP |
January 21, 2019 |
2,00,000 |
0.01 |
4,86,087 |
0.02 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
4,86,087 |
0.02 |
3 |
Mr. R. Shankar Raman |
 |
 |
 |
 |
 |
 |
(Non-Executive Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
24,461 |
- |
 |
 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
24,461 |
- |
4 |
Mr. P. V. Bhide |
 |
 |
 |
 |
 |
 |
(Independent Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
4,990 |
- |
- |
- |
 |
At the end of the year |
March 31, 2019 |
- |
- |
4,990 |
- |
5 |
Mr. Thomas Mathew T. |
 |
 |
 |
 |
 |
 |
(Independent Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
N.A. |
- |
- |
 |
At the end of the year |
March 31, 2019 |
 |
 |
Nil |
N.A. |
6 |
Ms. Nishi Vasudeva |
 |
 |
 |
 |
 |
 |
(Independent Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
N.A. |
 |
 |
 |
Purchase |
October 05, 2018 |
1,703 |
- |
 |
 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
1,703 |
- |
7 |
Dr. (Mrs.) Rajani R. Gupte (1) (Independent Director) |
 |
 |
 |
 |
 |
 |
At the time of joining |
June 28, 2018 |
Nil |
N.A. |
 |
 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
Nil |
N.A. |
8 |
Mr. Pavninder Singh (Nominee Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
Nil |
N.A. |
- |
- |
 |
At the end of the year |
March 31, 2019 |
 |
 |
Nil |
N.A. |
9 |
Mr. Prabhakar B.(2) |
 |
 |
 |
 |
 |
 |
(Non-Executive Director) |
 |
 |
 |
 |
 |
 |
At the time of joining |
June 28, 2018 |
353 |
- |
- |
- |
 |
At the end of the year |
March 31, 2019 |
 |
 |
353 |
- |
10 |
Mr. Harsh Mariwala (3)' |
 |
 |
 |
 |
 |
 |
(Independent Director) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 01, 2018 |
4,00,000 |
0.02 |
 |
 |
 |
Purchase |
September 21, 2018 |
1,30,000 |
0.01 |
5,30,000 |
0.03 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
5,30,000 |
0.03 |
11 |
Mr. Sachinn Joshi (Chief Financial Officer) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 1, 2018 |
1,83,500 |
0.01 |
- |
- |
 |
Purchase |
August 02, 2018 |
286 |
- |
183,786 |
0.01 |
 |
Purchase |
August 03, 2018 |
275 |
- |
184,061 |
0.01 |
 |
Purchase |
August 06, 2018 |
279 |
- |
184,340 |
0.01 |
 |
Purchase |
August 08, 2018 |
286 |
- |
184,626 |
0.01 |
 |
At the end of the year |
March 31, 2019 |
 |
 |
184,626 |
0.01 |
12 |
Ms. Apurva Rathod (Company Secretary) |
 |
 |
 |
 |
 |
 |
At the beginning of the year |
April 1, 2018 |
200 |
- |
 |
 |
 |
At the end of the year |
March 31, 2019 |
- |
- |
200 |
- |
Â
* After considering increase in paid up share capital of the Company on allotment of shares pursuant to exercise of option granted under ESOP Scheme(s). (1) Appointed as Independent Director with effect from June 28, 2018. (2) Appointed as Non-Executive Director with effect from June 28, 2018. (3) Ceased to be an Independent Director with effect from April 1, 2019. - less than 0.01%.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
 |
 |
 |
 |
(Rs Cr) |
Particulars |
Secured Loans excluding deposits |
Unsecured Loans |
Deposits |
Total Indebtedness |
Indebtedness at the beginning of the financial year |
 |
 |
 |
 |
i) Principal Amount |
 |
404.96 |
- |
404.96 |
ii) Interest due but not paid |
- |
- |
- |
- |
iii) Interest accrued but not due |
 |
63.73 |
- |
63.73 |
Total (i+ii+iii) |
- |
468.70 |
 |
468.70 |
Change in Indebtedness during the financial year |
 |
 |
 |
 |
i) Additions |
- |
7,401.41 |
- |
7,401.41 |
ii) Reduction |
 |
6,638.89 |
- |
6,638.89 |
iii) Interest accrued but not due |
- |
(63.73) |
- |
(63.73) |
Net Change |
- |
698.78 |
- |
698.78 |
Indebtedness at the end of the financial year |
 |
 |
 |
 |
i) Principal Amount |
- |
1,167.48 |
- |
1,167.48 |
ii) Interest due but not paid |
 |
- |
- |
 |
iii) Interest accrued but not due |
- |
- |
- |
- |
Total (i+ii+iii) |
- |
1,167.48 |
- |
1,167.48 |
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director (MD), Whole time director (WTD) and/or Manager
 |
 |
(Amount in Rs) |
Sr. No. |
Particulars of Remuneration |
Name of the MD/WTD/Manager |
 |
Mr. Dinanath Dubhashi |
|
 |
 |
(Managing Director & Chief Executive Officer) |
1. |
Gross salary: |
 |
 |
(a) Salary as per provisions contained in Section 17(1) of the Income Tax, 1961. |
4,71,16,100 |
 |
(b) Value of perquisites under section 17(2) of the Income Tax Act, 1961(1) |
1,16,39,800 |
 |
(c) Profit in lieu of salary under section 17(3) of the Income Tax Act, 1961 |
 |
2. |
Stock option (Number of options) |
20,00,000 |
3. |
Sweat Equity |
- |
4. |
Commission |
 |
 |
- as % of profit |
 |
 |
- others (specify) |
- |
5. |
Others, please specify |
- |
 |
Total (A) |
5,87,55,900 |
 |
Ceiling as per the Act |
Rs 15.20 cr (being 5% of Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013) |
(1) Includes perquisite on ESOPs exercised during the year.
B. Remuneration to other Directors
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
(Amount in Rs) |
Particulars of Remuneration |
Name of the Directors |
||||||||||
Independent Directors |
Non-Executive Directors |
Total Amount |
|||||||||
Independent Directors |
Mr. S. V. Haribhakti |
Mr. P. V. Bhide |
Mr. Thomas Mathew T. |
Ms. Nishi Vasudeva |
Dr. (Mrs.) Rajani R. Gupte(1) |
Mr. Harsh Mariwala (2) |
Ms. Vaishali Kasture (3) |
Mr. R. Shankar Raman |
Mr. Pavninder Singh |
Mr. Prabhakar B.(4) |
|
(a) Fee for attending Board and Committee meetings |
7,00,000 |
4,50,000 |
5,80,000 |
3,90,000 |
2,00,000 |
4,20,000 |
1,00,000 |
 |
1,90,000 |
2,00,000 |
32,30,000 |
(b) Commission |
50,00,000 |
11,25,000 |
13,87,000 |
11,32,000 |
6,00,000 |
12,60,000 |
1,50,000 |
 |
5,85,000 |
6,00,000 |
1,18,39,000 |
(c) Others, please specify |
- |
- |
- |
- |
- |
- |
- |
- |
 |
- |
- |
Total (B) |
57,00,000 |
15,75,000 |
19,67,000 |
15,22,000 |
8,00,000 |
16,80,000 |
2,50,000 |
- |
7,75,000 |
8,00,000 |
1,50,69,000 |
Total Managerial Remuneration = (A) + (B) |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
7,38,24,900 |
Overall Ceiling as Rs. 33.44 cr (being 11% of Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013) per the Act
 (1) Appointed as an Independent Director with effect from June 28, 2018. (2) Ceased to be an Independent Director with effect from April 1, 20/9. (3) Ceased to be an Independent Director with effect from May 29, 2018. (4) Appointed as Non-Executive Director with effect from June 28, 2018.
C. Remuneration to Key Managerial Personnel other than MD / MANAGER / WTD
 |
 |
(Amount in Rs.) |
||
Sr. No. |
Particulars of Remuneration |
Name of the Key Managerial Personnel |
Total Amount |
|
 |
Mr. Sachinn Joshi (CFO) |
Ms. Apurva Rathod (CS) |
||
1 |
Gross Salary: |
 |
 |
 |
 |
a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 |
2,11,23,088 |
85,54,782 |
2,96,77,870 |
 |
b) Value of perquisites under Section 17(2) of the Income Tax Act, 1961 |
28,800 |
 |
28,800 |
 |
c) Profits in lieu of salary under Section 17(3) of the Income Tax Act, 1961 |
 |
 |
 |
2 |
Stock Option (Number of options) |
4,00,000 |
2,50,000 |
6,50,000 |
3 |
Sweat Equity |
- |
- |
- |
4 |
Commission |
 |
 |
 |
 |
- as % of profit |
 |
 |
 |
 |
- others, specify |
- |
- |
- |
5 |
Others, please specify |
- |
- |
- |
 |
Total |
2,11,51,888 |
85,54,782 |
2,97,06,670 |
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES: NONE
 |
For and on behalf of the Board of Directors |
|
 |
S. V. Haribhakti |
Dinanath Dubhashi |
 |
Chairperson DIN: 00007347 |
Managing Director & Chief Executive Officer |
 |
 |
DIN: 03545900 |
Place: Mumbai |
 |
 |
Date: April 28, 2019 |
 |
 |
Â
Mar 31, 2018
Board''s Report
Dear Members,
The Directors of your Company have the pleasure in presenting the Tenth Annual Report together with the audited financial statements for the financial year ("FY") ended March 31, 2018.
FINANCIAL RESULTS
The summary of the Company''s financial performance, both on a consolidated and standalone basis, for the FY 2017-18 as compared to the previous FY 2016-17 is given below:
(Rs, in Lakh)
Particulars |
Consolidated |
Standalone |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Total Income |
10,49,994.08 |
8,57,231.01 |
47,837.11 |
31,488.99 |
Less: Total Expenses |
8,76,011.69 |
7,49,340.82 |
8,368.76 |
6,978.26 |
Profit before Tax |
1,73,982.39 |
1,07,890.19 |
39,468.35 |
24,510.73 |
Less: Tax Expense |
27,483.30 |
3,643.67 |
2,684.52 |
(355.44) |
Profit after Tax |
1,46,499.09 |
1,04,246.52 |
36,783.83 |
24,866.17 |
Add: Share in profit of associate company |
83.39 |
574.73 |
- |
- |
Add: Share of minority interest |
633.68 |
(602.58) |
- |
- |
Profit for the year |
1,45,948.80 |
1,04,218.67 |
36,783.83 |
24,866.17 |
Add: Balance brought forward from previous year |
1,84,037.58 |
1,18,752.54 |
16,509.32 |
9,065.58 |
Balance Available |
3,29,986.38 |
2,22,971.21 |
53,293.15 |
33,931.75 |
Appropriations Statutory Reserve |
17,665.98 |
8,020.39 |
7,356.77 |
4,973.24 |
Dividend paid for previous year |
14,573.70 |
5.78 |
14,573.70 |
5.78 |
Dividend Distribution Tax |
7,673.30 |
6,713.05 |
- |
2,104.46 |
Interim dividend on Preference Shares |
9,306.55 |
10,677.49 |
9,306.55 |
10,338.95 |
Transfer to/(from) Debenture Redemption Reserve |
4,806.91 |
67.15 |
- |
- |
Transfer to Reserve u/s 36(1)(viii) of Income Tax Act, 1961 |
5,300.40 |
9,734.72 |
- |
- |
Transfer to Reserve u/s 29-C of National Housing Bank |
3,327.12 |
2,729.93 |
- |
- |
Unamortised loss on sale of loans |
1,387.45 |
- |
- |
- |
Share in Associates'' Reserves |
- |
985.12 |
- |
- |
Surplus in the Statement of Profit and Loss |
2,65,944.97 |
1,84,037.58 |
22,056.13 |
16,509.32 |
FINANCIAL PERFORMANCE
Being a Core Investment Company, the Company''s standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
Consolidated
- Total income grew by 22% from Rs, 8,57,231.01 Lakh in FY 2016-17 to Rs, 10,49,994.08 Lakh in FY 2017-18.
- Profit before taxes grew from Rs, 1,07,890.19
Lakh in FY 2016-17 to Rs, 1,73,982.39 Lakh in FY 2017-18.
- Profit for the year also grew from Rs, 1,04,218.67 Lakh in FY 2016-17 to Rs, 1,45,948.80 Lakh in FY 2017-18.
During the year, the net loan book size grew from Rs, 61,64,849.99 Lakh to Rs, 78,29,922.00 Lakh reflecting a growth of 27%.
The Average Assets Under Management ("AAUM") of the Mutual Fund business stood at Rs, 65,93,164.73 Lakh for the quarter ended March 31, 2018 as against Rs, 39,30,000.00 Lakh for the quarter ended March 31, 2017, reflecting a growth of 68%.
The Average Assets Under Service ("AAUS") of the Wealth Management business stood at Rs, 18,34,711.22 Lakh for the quarter ended March 31, 2018 as against Rs, 13,62,300.83 Lakh for the quarter ended March 31, 2017, reflecting a growth of 35%.
Standalone
- Total income grew from Rs, 31,488.99 Lakh in FY 2016-17 to Rs, 47,837.11 Lakh in FY 2017-18.
- Profit before tax grew from Rs, 24,510.73 Lakh in FY 2016-17 to Rs, 39,468.35 Lakh in FY 2017-18.
- Profit after tax grew from Rs, 24,866.17 Lakh in FY 2016-17 to Rs, 36,783.83 Lakh in FY 2017-18.
Appropriations
The Company proposes to transfer Rs, 7,356.77 Lakh (previous year Rs, 4,973.24 Lakh) to Special Reserve created u/s 45âIC of the Reserve Bank of India Act, 1934. INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of Management Discussion & Analysis Report forming part of this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report. DIVIDEND
The Dividend Distribution Policy of the Company approved by the Board is in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The Policy has been uploaded on the Company''s website at https://www. ltfs. com/investors, html.
The Board of Directors had declared and paid an interim dividend @ 9.00% (one option), 8.40% (one option), 8.50% (one option), 8.35% (two options) and 8.15% (one option) per share as applicable, on the four series of Cumulative Compulsorily Redeemable Preference Shares ("CCRPS") of face value of Rs, 100 each of the Company, for FY 2017-18, entailing an outflow of Rs, 9,306.55 Lakh (excluding Dividend Distribution Tax). The Board of Directors are pleased to recommend a final dividend of Rs, 1 per Equity Share of Rs, 10 each (previous year Rs, 0.80 per share) subject to approval of the Members in the ensuing Annual General Meeting ("AGM"). In terms of the revised Accounting Standard (AS-4) ''Contingencies and events occurring after Balance Sheet'' as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016 dated March 30, 2016, proposed dividend of Rs, 19,956.77 Lakh and Dividend Distribution Tax (net) thereon is not recognized as liability as on March 31, 2018.
The dividend, if approved at the ensuing AGM, would be paid to those Members whose name appears in the Register of Members / Beneficial Owners maintained by the depositories as stated in Notice of the ensuing AGM. CREDIT RATING
During the year under review, CARE Ratings Limited ("CARE") and ICRA Limited ("ICRA") reviewed the ratings on various debt instruments of the Company. Furthermore, new rating was assigned by India Ratings and Research Private Limited ("India Ratings") to the non-convertible debentures ("NCD") and commercial papers of the Company.
CARE upgraded the long-term rating on NCDs to "CARE AAA/Stable" (Triple A; Outlook: Stable by CARE) from "CARE AA /Positive" (Double A Plus; Outlook: Positive by CARE) and the rating on CCRPS was upgraded to "CARE AAA (RPS)/Stable" (Triple A [Redeemable Preference Shares]; Outlook: Stable by CARE) from "CARE AA (RPS)/Positive" (Double A Plus [Redeemable Preference Shares]; Outlook: Positive by CARE). These long-term ratings carried a "Stable" outlook as on March 31, 2018. During the FY 2017-18, the outlook on these ratings was revised to "Positive" from "Stable" in October 2017 and subsequent to the upgrade in long-term ratings, in February 2018 the outlook was again revised to "Stable" from "Positive". CARE has also reaffirmed the rating assigned to the commercial papers issued by the Company at "CARE A1 " (A One Plus by CARE).
ICRA has reaffirmed its ratings on the rated NCD at "ICRA AA /Stable" (Double A Plus; Outlook: Stable by ICRA). During the year under review, ICRA has also assigned rating of "ICRA A1 " (A One Plus by ICRA) to the commercial papers issued by the Company.
In January 2018, India Ratings assigned a rating of "IND AAA/Stable" (Triple A; Outlook: Stable by India Ratings) to the NCD issues and a rating of "IND A1 " (A One Plus by India Ratings) to the commercial paper issued by the Company.
The instruments/bank facilities with long term ratings of AAA are considered to have highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
The instruments/bank facilities with long term ratings of AA are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.
The instruments with short term ratings of A1 are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
SHARE CAPITAL
The Company had allotted 6,38,20,990 Warrants ("Warrants") with each Warrant convertible into one Equity Share of the face value of Rs, 10 each at a price of Rs, 74 per Warrant to BC Asia Growth Investments ("Investor") on December 18, 2015 on a preferential basis. The Company had received 25% upfront money of total consideration from the Investor at the time of allotment of Warrants and balance 75% was received at the time of exercise of notice for option to convert the Warrants. Pursuant to the said conversion of Warrants, the Company has allotted 6,38,20,990 Equity Shares of face value of Rs, 10 each to Investor on May 17, 2017. Further, the Company also allotted 10,78,10,899 Equity Shares of Rs, 10 each at an issue price of Rs, 185.51 to Larsen & Toubro Limited, the Promoter of the Company by way of preferential issue under Chapter VII of Securities and Exchange Board of India (Issue of Securities and Disclosure Requirements) Regulations, 2009 ("SEBI ICDR") on March 8, 2018 and
6,30,51,702 Equity Shares of Rs, 10 each at an issue price of Rs, 158.60 to the eligible qualified institutional buyers on a private placement basis under Chapter VIII of SEBI ICDR on March 15, 2018.
During the year under review, the Company has issued 16,91,008 Equity Shares and 35,80,500 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 respectively.
During the year under review, the Company also redeemed 1,79,00,000 CCRPS amounting to Rs, 17,900 Lakh.
Pursuant to the allotment of the Equity Shares and subsequent redemption of CCRPS, the paid-up share capital of the Company was Rs, 3,03,007.70 Lakh (including preference share capital of Rs, 1,03,440 Lakh) as at March 31, 2018 as compared to Rs, 2,96,912.19 Lakh (including preference share capital of Rs, 1,21,340 Lakh) as at March 31, 2017.
INVESTMENT IN SUBSIDIARIES
During the year under review, the Company has infused capital in its following subsidiaries by subscribing to the Equity Shares offered by them:
Name of subsidiary company |
Amount of capital subscribed (Rs, in Lakh) |
L&T Finance Limited |
1,40,000 |
L&T Housing Finance Limited |
60,000 |
L&T Infrastructure Finance |
45,000 |
Company Limited |
|
L&T Infra Debt Fund Limited |
1,635 |
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company ("NBFC-CIC") pursuant to the receipt of Certificate of Registration from the Reserve Bank of India ("RBI") dated September 11, 2013, under Section 45-IA of the Reserve Bank of India Act, 1934.
STATUTORY DISCLAIMER
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.
FIXED DEPOSITS
The Company being a NBFC-CIC has not accepted any deposits from the public during the year under review.
DIRECTORS
The composition of the Board is in accordance with the provisions of Section 149 of the Companies Act, 2013 ("the Act") and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors. The complete list of Directors of the Company has been provided as part of the Corporate Governance Report. During the year under review, Mr. Y. M. Deosthalee ceased to be Director and Chairperson of the Company with effect from May 31, 2017 and Mr. S. V. Haribhakti was appointed as Chairperson of the Company with effect from June 1, 2017. Mr. Amit Chandra, Nominee Director and Mr. B. V. Bhargava, an Independent Director of the Company, resigned from the Board of Directors to devote time to other commitments and accordingly, ceased to be Directors of the Company with effect from June 15, 2017 and August 31, 2017 respectively. The Board places on record its appreciation of the valuable services rendered by them during their tenure as the Directors of the Company.
During the year under review, the Company appointed Ms. Nishi Vasudeva and Ms. Vaishali Kasture as Independent Directors in accordance with the provisions of Sections 149, 152 and 161 of the Act and Mr. Pavninder Singh as the Nominee Director in accordance with the provisions of Section 161 of the Act, not being liable to retire by rotation with effect from June 15, 2017, pursuant to approval of the Members at the Ninth AGM held on August 28, 2017.
Section 152 of the Act provides that unless the Articles of Association provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the independent directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation. Accordingly, Mr. Dinanath Dubhashi, Director will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The terms and conditions of appointment of Independent Directors are also available on the website of the Company at https://www. ltfs. com/investors, html.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence, as required pursuant to provisions of the Section 149(7) of the Act, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and are not disqualified from continuing as Independent Directors.
Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details relating to the familiarization programme are available on the website of the Company at https://www. ltfs.com/investors.html.
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI.
All the Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL ("KMPs")
There was no change in the KMPs of the Company during the year under review. As at March 31, 2018, the Company had the following KMPs:
1) Mr. Dinanath Dubhashi - Managing Director & Chief Executive Officer
2) Mr. Sachinn Joshi - Chief Financial Officer
3) Ms. Apurva Rathod - Company Secretary
COMPANY''S POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
A. Background and Objectives
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the SEBI Listing Regulations, as amended from time to time, requires the Nomination and Remuneration Committee ("NRC") to formulate a policy relating to the remuneration for the Directors, Senior Management/KMPs and other employees of the Company and recommend the same for approval of the Board.
Further, Section 134 of the Act stipulates that the Board''s Report is required to include a statement on Company''s Policy on Directors'' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directors'' appointment and remuneration for Directors, KMPs and other employees.
B. Brief framework of the Policy
The objective of this Policy is:
a) to determine inter-alia, qualifications, positive attributes and independence of a Director;
b) to guide on matters relating to appointment and removal of Directors and Senior Management;
c) to lay down criteria/evaluate performance of the Directors; and
d) to guide on determination of remuneration of the Directors, Senior Management/KMPs and other employees.
C. Appointment of Director(s) - Criteria identification
The NRC identifies and ascertains the integrity, professional qualification, expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his/her appointment.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and rules made there under and the SEBI Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and the SEBI Listing Regulations, before the appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he/she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of Managing Director and Whole-time Director is subject to provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and rules there under. The NRC ensures that a person does not occupy position as a Managing Director / Whole-time Director beyond the age of seventy years, unless the appointment is approved by a special resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and Senior Management / KMPs / Employees
- Independent Directors / Non-Executive Directors
The NRC carries out evaluation of performance of Independent Directors / Non-Executive Directors every year ending March 31st on the basis of the following criteria:
a) Membership & Attendance - Board and Committee Meetings;
b) Contribution during such meetings;
c) Active participation in strategic decision making;
d) Inputs to executive management on matters of strategic importance; and
e) Such other matters, as the NRC / Board may determine from time to time.
- Executive Directors
The NRC carries out evaluation of performance of Executive Directors ("EDs") every year ending March 31st. The evaluation is on the basis of Key Performance Indicators ("KPIs"), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of EDs. The identified KPIs for EDs are approved by the Board, pursuant to recommendation of the NRC, if required.
- Senior Management / KMPs / Employees
The HR Department carries out the evaluation of the aforementioned persons every year ending March 31st, with the Department Head(s) / Management concerned. KPIs are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s) / Management / Department Head(s) to determine whether the performance benchmarks are achieved. The payment of remuneration / annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorized to design the framework for evaluating the EDs / Senior Management / KMPs / employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during a financial year. Training and Development Orientation programs on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
E. Criteria for Remuneration
NRC while determining the criteria for remuneration for Directors, Senior Management / KMPs and other employees ensures that:
a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c) remuneration to Directors, Senior Management / KMPs involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
Manner of Evaluation
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors has to be made.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Managing Director and Chief Executive Officer and Chairperson of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
- Evaluation of Board as a whole and the Committees is done by the individual directors/ members, followed by submission of collation to NRC and feedback to the Board.
b) Independent / Non-Executive Directors Evaluation:
- Evaluation done by Board members excluding the Director being evaluated is submitted to the Chairperson of the Company and individual feedback provided to each Director.
c) Chairperson / Managing Director & Chief Executive Officer Evaluation:
- Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC provides feedback to the NRC and subsequently to the Board.
EMPLOYEE STOCK OPTION SCHEME
The disclosures required to be made under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and any amendments thereof is available on the website of the Company at https://www. ltfs.com/investors.html.
The certificate from the Statutory Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 500 listed entities based on their market capitalization as on March 31, 2018 are required to submit a Business Responsibility Report ("BRR") as a part of the Annual Report. The Company''s BRR describing the initiatives taken by the Company has been hosted on the website of the Company at https://www.ltfs.com/investors.html. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Company at the registered office.
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming part of the Annual Report. The certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2) of the Act and the rules made there under, the Members at their Eighth AGM held on August 23, 2016, had appointed M/s. B.K. Khare & Co., Chartered Accountants (ICAI Firm''s Registration Number 105102W) and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm''s Registration Number 117366W/W-100018) as the Joint Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of the Eighth AGM till the conclusion of the Thirteenth AGM. Joint Statutory Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.
AUDITORS'' REPORT
The Auditors'' Report to the Members for the year under review does not contain any qualification. The Notes to the Accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Ms. Naina R. Desai, Practicing Company Secretary to undertake the Secretarial Audit of the Company for FY 2017-18.
The Secretarial Audit Report is appended as Annexure B to this Report.
There is no adverse remark, qualification, reservation or disclaimer in the Secretarial Audit Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure C to this Report.
In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said Annexure is available for inspection by the Members at the registered office of the Company during the business hours on any working day of the Company till the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at the registered office.
The Board of Directors affirms that the remuneration paid to the employees of the Company is as per the Policy on Directors'' appointment and remuneration for Directors, KMPs and other employees and none of the employees listed in the said Annexure are related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the Company''s activities as Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.
There were no foreign exchange earnings during the year (previous year '' Nil); the foreign exchange outgo by the Company during the year was '' 146.82 Lakh (previous year '' 485.89 Lakh) towards professional fees, travelling expenses and Directors'' sitting fees.
DEPOSITORY SYSTEM
The Company''s Equity Shares are compulsorily tradable in electronic form. As on March 31, 2018, out of the Company''s total equity paid-up share capital comprising of 199,56,76,960 Equity Shares, only 20,313 Equity Shares were in physical form and the remaining capital is in dematerialized form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail the facility of dematerialization.
SUBSIDIARY COMPANIES
The Company conducts its business through subsidiaries its the various business segments in which it operates. As of March 31, 2018, the Company had 11 subsidiaries (including step down subsidiaries).
MERGER - SUBSIDIARY COMPANY
During the year under review, L&T Access Distribution Services Limited (CIN:U65100MH2011PLC284632), wholly owned subsidiary of the Company was merged with L&T Capital Markets Limited (CIN:U67190MH2013PLC240261), another wholly owned subsidiary of the Company with effect from November 10, 2017.
MATERIAL SUBSIDIARIES
As required under Regulations 16(1 )(c) and 46 of the SEBI Listing Regulations, the Board of Directors has approved the Policy for determining Material Subsidiaries ("Policy"). The details of the Policy are available on the website of the Company at https://www. ltfs. com/investors, html.
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY / ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure D to this Report. The contribution of the subsidiaries is given as a part of the Management Discussion & Analysis Report forming part of this Report. DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirms that, to the best of their knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws including applicable secretarial standards and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit ("IA") function. The scope and authority of the IA function is defined in the IA Charter.
The IA function of L&T Financial Services Group ("LTFS") monitors and evaluates the efficacy and adequacy of the internal control system in the Company and its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of the IA function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee ("AC") of the Company from time to time.
BOARD MEETINGS
The details of the Board meetings held during FY 2017-18 are disclosed in the Corporate Governance Report appended to this Report.
COMPOSITION OF AUDIT COMMITTEE
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of the SEBI Listing Regulations and RBI Regulations. The details of the same are disclosed in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.
The Company has also formulated a CSR Policy which is available on the website of the Company at https://www.ltfs.com/csr.html. An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure E to this Report.
VIGIL MECHANISM
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act, the Company has adopted a Vigil Mechanism Framework, under which the "Whistle Blower Investigation Committee" ("the Committee") has been set up. The objective of the policy is to establish a redressal forum, which addresses all concerns raised on questionable practices and through which the Directors and employees can raise actual or suspected violations.
The Head of IA of LTFS acts as an Ombudsman. The role of Ombudsman is to review the grievance at the initial stage and in case the grievance is material, the same is forwarded to the Committee, for investigation. After investigation, the complaint with Investigation Report is forwarded to AC/Managing Director/ Whole-time Director as the case may be. At the AC, brief update is presented to the Members for their review. The Committee takes necessary actions of maintaining confidentiality within the organization on matters brought to its attention.
The mechanism framed by the Company is in compliance with the requirements of the Act and SEBI Listing Regulations and the same is available on the website of the Company at https://www. ltfs. com/investors, html.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
Details of loans, guarantees and investments are given in the Notes to the Financial Statements, as applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI Regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on the Company''s website at https://www.ltfs.com/investors.html. The RPT Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
- All transactions with related parties ("RPTs") are referred to the AC of the Company for approval, irrespective of its materiality. The AC, also approves any subsequent modification in the RPTs. The process of approval of RPTs by the Board and Shareholders is as under:
a) Board:
Generally all RPTs are in the ordinary course of business and at arm''s length price.
RPTs which are not at arm''s length and which are not in the ordinary course of business are approved by the Board.
b) Shareholders:
All material RPTs require prior approval of the shareholders, based on recommendation of the Board, through ordinary resolution passed at the general meeting.
Where any contract or arrangement is entered into by a director or any other employee without obtaining the consent of the Board or approval by a ordinary resolution in the general meeting, it is to be ratified by the Board or by the shareholders at a meeting, as the case may be, within three months from the date on which such contract or arrangement was entered into.
The related parties are abstained from voting on such resolutions whether the entity is a related party to the particular transaction or not.
- All RPTs that were entered into during FY 2017-18 were on an arm''s length basis and were in the ordinary course of business and disclosed in the Financial Statements. There were no materially significant RPTs made by the Company with Promoters, Directors, KMPs or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to Notes to the Financial Statements which sets out related party disclosures.
RISK MANAGEMENT FRAMEWORK
The Company has constituted a Risk Management Committee ("RMC") in terms of the requirements of Regulation 21 of the SEBI Listing Regulations and RBI Regulations. The details of the same are disclosed in the Corporate Governance Report.
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC is kept apprised of the proceedings of the meetings of the RMC and also apprised about the risk management framework at subsidiaries.
POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a policy for prevention, prohibition and redressal of sexual harassment at workplace. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
EXTRACT OF ANNUAL RETURN AS REQUIRED AND PRESCRIBED UNDER SECTION 92(3) OF THE ACT AND RULES MADE THEREUNDER
The extract of Annual Return in Form No. MGT-9 as required under Section 92(3) of the Act and as prescribed in Rule 12 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure F to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.
Further, no penalties have been levied by RBI / any other Regulators during the year under review.
RBI REGULATIONS
The Company has complied with all the applicable regulations of RBI as on March 31, 2018.
OTHER DISCLOSURES
During the year under review, the Company has not obtained any registration/license/authorization, by whatever name called from any other financial sector regulators.
ACKNOWLEDGEMENT
The Directors express their sincere gratitude to the Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Company''s bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Company''s stakeholders and trust reposed by them in your Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company and its subsidiaries across all levels, resulting in successful performance during the year.
For and on behalf of the Board of Directors
S. V. Haribhakti Dinanath Dubhashi
Chairperson Managing Director &
DIN: 00007347 Chief Executive Officer
DIN:03545900
Place: Mumbai
Date: May 3, 2018
Mar 31, 2017
Dear Members,
The Directors of your Company have the pleasure in presenting the Ninth Annual Report together with the audited financial statements for the financial year ended March 31, 2017.
FINANCIAL RESULTS
The summary of the Companyâs financial performance, both on a consolidated and standalone basis, for the financial year (âFYâ) 2016-17 as compared to the previous FY 2015-16 is given below:
(Rs. in Lakhs)
Particulars |
Consolidated |
Standalone |
||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
Total Income |
8,57,231.01 |
7,47,068.96 |
31,488.99 |
42,745.10 |
Less: Total Expenses |
7,49,340.82 |
6,21,802.43 |
6,978.26 |
5,935.81 |
Profit before Tax |
1,07,890.19 |
1,25,266.53 |
24,510.73 |
36,809.29 |
Less: Tax Expense |
3,643.67 |
39,897.72 |
(355.44) |
(994.37) |
Profit after Tax |
1,04,246.52 |
85,368.81 |
24,866.17 |
37,803.66 |
Add: Share in profit of associate company |
574.73 |
300.45 |
- |
- |
Add: Share of minority interest |
(602.58) |
- |
- |
- |
Profit for the year |
1,04,218.67 |
85,669.26 |
24,866.17 |
37,803.66 |
Add: Balance brought forward from previous year |
1,18,752.54 |
1,11,843.49 |
9,065.58 |
9,051.95 |
Balance Available Appropriations |
2,22,971.21 |
1,97,512.75 |
33,931.75 |
46,855.61 |
Statutory Reserve |
8,020.39 |
22,707.58 |
4,973.24 |
7,560.74 |
Proposed Dividend on Equity Shares |
- |
14,027.19 |
- |
14,027.19 |
Dividend paid for previous year |
5.78 |
6.23 |
5.78 |
6.23 |
Dividend Distribution Tax on proposed dividend / dividend paid (including tax on Dividend paid for previous year) |
6,713.05 |
6,238.26 |
2,104.46 |
(11.41) |
Interim Dividend on Preference Shares |
10,677.49 |
16,708.77 |
10,338.95 |
16,207.28 |
Transfer to/(from) Debenture Redemption Reserve |
67.15 |
6,598.76 |
- |
- |
Transfer to Reserve u/s 36(1)(viii) of Income Tax Act, 1961 |
9,734.72 |
11,312.62 |
- |
- |
Transfer to Reserve u/s 29-C of National Housing Bank |
2,729.93 |
1,160.80 |
- |
- |
Unamortised loss on sale of loans |
16,252.55 |
- |
- |
- |
Share in Associatesâ Reserves |
985.12 |
- |
- |
- |
Surplus in the Statement of Profit and Loss |
1,67,785.03 |
1,18,752.54 |
16,509.32 |
9,065.58 |
FINANCIAL PERFORMANCE
Being a Core Investment Company, the Companyâs standalone revenue is, substantially, dividend from its subsidiaries and hence, it is meaningful to look at the consolidated performance.
Consolidated
- Total income grew by 15% from Rs.7,47,068.96 Lakhs in FY 2015-16 to Rs.8,57,231.01 Lakhs in FY 2016-17.
- Profit before taxes was Rs.1,25,266.53 Lakhs in
FY 2015-16 compared to Rs.1,07,890.19 Lakhs in FY 2016-17.
- Profit after tax has grown from Rs.85,669.26 Lakhs in FY 2015-16 to Rs.1,04,218.67 Lakhs in FY 2016-17.
During the year, the net loan book size grew from Rs.56,06,538.02 Lakhs to Rs.61,64,849.99 Lakhs reflecting a growth of 9.96%.
The Average Assets Under Management (âAAUMâ) of the Mutual Fund business stood at Rs.39,30,000 Lakhs for the quarter ended March 31, 2017 as against Rs.25,94,480 Lakhs for the quarter ended March 31, 2016, a growth of 51%.
The Average Assets Under Service (âAAUSâ) of the Wealth Management business stood at Rs.13,62,300.83 Lakhs for the quarter ended March 31, 2017 as against Rs.9,31,583.06 Lakhs for the quarter ended March 31, 2016, a growth of 46%.
Standalone
- Total income was Rs.42,745.10 Lakhs in FY 2015-16 compared to Rs.31,488.99 Lakhs in FY 2016-17.
- Profit before tax was Rs.36,809.29 Lakhs in FY 2015-16 compared to Rs.24,510.73 Lakhs in FY 2016-17.
- Profit after tax was Rs.37,803.66 Lakhs in FY 2015-16 compared to Rs.24,866.17 Lakhs in FY 2016-17.
Appropriations
The Company proposes to transfer Rs.4,973.24 Lakhs (previous year Rs.7,560.74 Lakhs) to Special Reserve created u/s 45âIC of the Reserve Bank of India Act, 1934.
INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
The information on the affairs of the Company has been given as part of the Management Discussion & Analysis Report forming part of this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report.
DIVIDEND
The Board of Directors of the Company has approved the Dividend Distribution Policy at its Meeting held on October 25, 2016 in line with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ). The Policy has been uploaded on the Companyâs website at http://www. ltfs.com/investors.html.
The Board of Directors had declared and paid an interim dividend @ 9.00% (one option), 8.40% (one option), 8.50% (one option), 8.35% (two options) and 8.15% (one option) per share as applicable, on the four series of Cumulative Compulsorily Redeemable Non-Convertible Preference Shares (âCCRPSâ) of face value of Rs.100/- each of the Company, for FY 2016-17, entailing an outflow of Rs.10,338.95 Lakhs (excluding Dividend Distribution Tax). No final dividend is proposed on CCRPS.
The Board of Directors are pleased to recommend a final dividend of Rs.0.80/- per Equity Share of Rs.10/each (previous year Rs.0.80/- per share) subject to approval of the Members in ensuing Annual General Meeting (âAGMâ). In terms of the revised Accounting Standard (AS-4) âContingencies and events occurring after Balance Sheetâ as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendments Rules, 2016 dated March 30, 2016, proposed dividend of Rs.14,556.34 Lakhs and Dividend Distribution Tax (net) thereon is not recognised as liability as on March 31, 2017.
The dividend, if approved at the ensuing AGM, would be paid to those Members whose name appears in the Register of Members/Beneficial Owners as stated in Notice of the ensuing AGM.
CREDIT RATING
During the year under review, Credit Analysis and Research Ltd. (âCAREâ) has accorded a rating of âCARE AA â [Double A Plus] with stable outlook for the issue of CCRPS. The rating indicates that the Preference Shares carry very low credit risk and are considered to have a high degree of safety regarding timely servicing of financial obligations.
SHARE CAPITAL
During the year under review, the Company has issued in total 18,03,810 Equity Shares and 5,19,500 Equity Shares to employees of the Company and its subsidiary companies pursuant to the exercise of stock options under the Employee Stock Option Scheme - 2010 and Employee Stock Option Scheme - 2013 respectively.
Pursuant to the allotment of the Equity Shares, the paid-up share capital of the Company was Rs.2,96,912.19 Lakhs (including preference share capital of Rs.1,21,340 Lakhs) as at March 31, 2017 as compared to Rs.2,96,679.86 Lakhs (including preference share capital of Rs.1,21,340 Lakhs) as at March 31, 2016.
INVESTMENT IN SUBSIDIARIES
During the year under review, the Company has infused capital in its following subsidiaries by subscribing to the Equity Shares offered by them:
Name of subsidiary company |
Amount of capital subscribed (Rs. in Lakhs) |
L&T Infrastructure Finance Company Limited |
22,000 |
L&T Housing Finance Limited |
7,500 |
L&T Access Distribution Services Limited |
1,535 |
L&T Capital Markets Limited |
200 |
REGISTRATION AS A CORE INVESTMENT COMPANY
The Company is a registered Non-Banking Financial Institution - Core Investment Company (âNBFC-CICâ) pursuant to the receipt of Certificate of Registration from the Reserve Bank of India (âRBIâ) dated September 11, 2013, under Section 45-IA of the Reserve Bank of India Act, 1934.
STATUTORY DISCLAIMER
The Company is having a valid Certificate of Registration dated September 11, 2013 issued by RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits/ discharge of liabilities by the Company.
FIXED DEPOSITS
The Company being a NBFC-CIC has not accepted any deposits from the public during the year under review.
DIRECTORS
The composition of the Board is in accordance with the provisions of Section 149 of the Companies Act, 2013 (âthe Actâ) and Regulation 17 of the Listing Regulations, with an appropriate combination of Non-Executive Directors and Independent Directors.
During the year under review, the Company had appointed Mr. Dinanath Dubhashi as a Whole-time Director, designated as Deputy Managing Director of the Company, with effect from April 14, 2016 upto and including July 21, 2016 and as Managing Director for the period July 22, 2016 upto and including April 13, 2021, on the terms and conditions approved by the Members at their Eighth AGM held on August 23, 2016. Mr. Y. M. Deosthalee continued to be the Chairperson of the Company.
Mr. N. Sivaraman, President & Whole-time Director ceased to be a Director on the Board of the Company with effect from close of business hours on April 11, 2016, consequent upon his retirement from the L&T Financial Services Group (âLTFSâ). Ms. Kamakshi Rao, an Independent Director of the Company, resigned from the Board of Directors to devote time to other commitments and accordingly ceased to be a Director of the Company with effect from March 21, 2017. Mr. Y. M. Deosthalee will retire from the Chairmanship and the Board effective May 31, 2017 and Mr. S. V. Haribhakti will take over as the Non-Executive Chairman from June 1, 2017. The Board places on record its appreciation of the valuable services rendered by the aforesaid Directors during their tenure as the Directors of the Company.
The complete list of Directors of the Company as of March 31, 2017 has been provided as part of the Corporate Governance Report.
Section 152 of the Act provides that unless the Articles of Association provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the independent directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation. Accordingly, Mr. R. Shankar Raman, Director will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
The terms and conditions of appointment of Independent Directors are available on the website of the Company at http://www. ltfs.com/investors.html.
Declaration by Independent Directors
All Independent Directors have submitted the declaration of independence, as required pursuant to the provisions of Section 149(7) of the Act, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and are not disqualified from continuing as Independent Directors.
Familiarization Programme
The Company has familiarized the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarization programme is available on the website of the Company at http://www. ltfs.com/ investors.html.
Fit and Proper Criteria & Code of Conduct
All the Directors meet the fit and proper criteria stipulated by RBI.
All the Directors of the Company have affirmed compliance with the Code of Conduct of the Company.
KEY MANAGERIAL PERSONNEL
During the year under review, with effect from July 22, 2016, Mr. Dinanath Dubhashi was appointed as the Managing Director of the Company and Mr. Y. M. Deosthalee continued to serve as the Chairperson of the Company.
Further, consequent to resignation of Mr. N. Suryanarayanan as the Company Secretary of the Company with effect from October 26, 2016, Ms. Apurva Rathod was appointed as the Company Secretary of the Company effective the aforesaid date. As at March 31, 2017, the Company had the following Key Managerial Personnel (âKMPsâ):
1) Mr. Dinanath Dubhashi - Managing Director
2) Mr. Sachinn Joshi - Chief Financial Officer
3) Ms. Apurva Rathod - Company Secretary
COMPANYâS POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION
A. Background and Objectives
Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations, as amended from time to time, requires the Nomination and Remuneration Committee (âNRCâ) to formulate a policy relating to the remuneration for the Directors, KMPs, Senior Management and other employees of the Company and recommend the same for approval of the Board. Further, Section 178(4) of the Act stipulates that the policy is required to be disclosed in the Boardâs Report.
Further, Section 134 of the Act stipulates that the Boardâs Report is required to include a statement on Companyâs policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of director and remuneration for KMPs and other employees.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directorsâ appointment and remuneration for Directors, KMP and other employees.
B. Brief Framework of the Policy The objective of this Policy is
a) to determine inter-alia, qualifications, positive attributes and independence of a Director;
b) to guide on matters relating to appointment and removal of Directors and Senior Management;
c) to lay down criteria/evaluate performance of the Directors; and
d) to guide on determination of remuneration of the Directors, KMPs and other employees
C. Appointment of Director(s) - Criteria Identification
The NRC identifies and ascertains the integrity, professional qualification, expertise and experience of the person, who is proposed to be appointed as a director and appropriate recommendation is made to the Board with respect to his/her appointment.
Appointment of Independent Directors is subject to the provisions of Section 149 of the Act read with Schedule IV and rules thereunder and Listing Regulations. The NRC satisfies itself that the proposed person satisfies the criteria of independence as stipulated under Section 149(6) of the Act and Listing Regulations, before their appointment as an Independent Director.
No person is eligible to be appointed as a Director, if he/she is subject to any disqualifications as stipulated under the Act or any other law(s) for the time being in force.
Appointment of Managing Director and Whole-time Director is subject to provisions of Sections 196, 197, 198 and 203 of the Act read with Schedule V and rules there under. The NRC ensures that a person does not occupy position as a Managing Director/Whole-time Director beyond the age of seventy years, unless the appointment is approved by a Special Resolution passed by the Company in general meeting. No re-appointment is made earlier than one year before the expiry of term.
D. Evaluation criteria of Directors and Senior Management/KMPs/Employees
- Non-Executive Directors/Independent Directors
The NRC carries out evaluation of performance of Independent Directors/Non-Executive Directors every year ending March 31st on the basis of the following criteria:
- Membership & Attendance - Board and Committee meetings;
- Contribution during such meetings;
- Active participation in strategic decision making;
- Inputs to executive management on matters of strategic importance; and
- Such other matters, as the NRC/Board may determine from time to time.
- Executive Directors
The NRC carries out evaluation of performance of Executive Directors (âEDsâ) every year ending March 31st. The evaluation is on the basis of Key Performance Indicators (âKPIâ), which are identified well in advance for EDs and weights assigned for each measure of performance keeping in view the distinct roles of ED. The identified KPI for EDs are approved by the Board, pursuant to recommendation of the NRC, if required.
- Senior Management/KMPs/Employees
The HR Department carries out the evaluation of the aforementioned persons every year ending March 31st, with the Department Head(s)/ Management concerned. KPI are identified well in advance at the commencement of the financial year. Performance benchmarks are set and evaluation of employees is done by the respective reporting Manager(s)/ Management to determine whether the performance benchmarks are achieved. The payment of remuneration/annual increment to the aforementioned persons is determined after the satisfactory completion of evaluation process.
The HR Department of the Company is authorized to design the framework for evaluating the EDs/KMPs/Senior Management Personnel/Employees. The objective of carrying out the evaluation by the Company is to identify and reward those with exceptional performances during any financial year. Training and Development Orientation programs on a need basis are provided to employees, whose performance during any financial year does not meet the benchmark criteria.
E. Criteria for Remuneration
NRC while determining the criteria for remuneration for Directors, KMPs/Senior Management and other employees ensures that:
- the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
- relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
- remuneration to Directors, KMPs and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Act and the provisions of the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually and the Committees of the Board.
Manner of Evaluation
The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual directors has to be made.
It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-Executive Directors/Managing Director and Chairperson of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board and Committee Evaluation:
- Evaluation of Board as a whole and the Committees is done by the individual directors, followed by submission of collation to NRC and feedback to the Board.
b) Independent / Non-Executive Directors Evaluation:
- Evaluation done by Board members excluding the Director being evaluated is submitted to the Chairperson of the Company and individual feedback provided to each Director.
c) Chairperson/Managing Director Evaluation:
- Evaluation as done by the individual directors is submitted to the Chairperson of the NRC and Chairperson of the NRC provides feedback to the NRC and subsequently to the Board.
EMPLOYEE STOCK OPTION SCHEME
The disclosures required to be made under the SEBI (Share Based Employee Benefits) Regulations, 2014 (âSBEB Regulationsâ) and any amendments thereof is available on the website of the Company at http://www. ltfs.com/investors.html.
The certificate from the Statutory Auditors, confirming compliance with the aforesaid provisions has been appended as Annexure A to this Report.
BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34(2)(f) of the Listing Regulations, top 500 listed entities based on their market capitalisation as on March 31, 2017 are required to submit a Business Responsibility Report (âBRRâ) as a part of the Annual Report. The Companyâs BRR describing the initiatives taken by the Company has been hosted on the website of the Company at http:// www.ltfs.com/investors.html. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Company at its Registered Office.
REPORT ON CORPORATE GOVERNANCE
The Report on Corporate Governance for the year under review, is forming part of the Annual Report. The certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is appended to the Corporate Governance Report.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139(2) of the Act and the rules made thereunder, the Members at their Eighth AGM held on August 23, 2016, had appointed M/s. B.K. Khare & Co., Chartered Accountants (ICAI Firmâs Registration Number 105102W) and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firmâs Registration Number 117366W/W-100018) as the Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of the Eighth AGM till the conclusion of the Thirteenth AGM.
Further, in terms of Section 139(1) of the Act, the appointment of Statutory Auditors is required to be placed for ratification at every AGM. Accordingly, the appointment of M/s. B. K. Khare & Co., Chartered Accountants and M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company, has been placed for ratification by the Members at the ensuing Ninth AGM.
With respect to the aforesaid appointment, the Company has received a certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, would be in accordance with the provisions of Section 141 of the Act. They have also confirmed that they hold a valid Peer Review Certificate issued to them by the Institute of Chartered Accountants of India (âICAIâ).
PARTICULARS OF EMPLOYEES
The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure B to this Report.
In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said Annexure is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company upto the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at the Registered Office.
The Board of Directors affirms that the remuneration paid to employees of the Company is as per the Policy on Directorsâ appointment and remuneration for Directors, KMPs and other Employees and none of the employees listed in the said Annexure is related to any Directors of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the Companyâs activities as a Core Investment Company carrying out its activities through its subsidiaries, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.
There were no foreign exchange earnings during the year (previous year Rs.Nil); the foreign exchange outgo by the Company during the year was Rs.485.89 Lakhs (previous year Rs.228.06 Lakhs) towards professional fees, Directorsâ sitting fees and travelling expenses.
DEPOSITORY SYSTEM
The Companyâs Equity Shares are compulsorily tradable in electronic form. As on March 31, 2017, out of the Companyâs total equity paid-up share capital comprising of 1,75,57,21,861 Equity Shares, only 2,21,940 Equity
Shares were in physical form and the remaining capital is in demat form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail the facility of dematerialisation.
SUBSIDIARY COMPANIES
The Company conducts its business through subsidiaries for the various business segments in which it operates. As of March 31, 2017, the Company had 12 subsidiaries (including step down subsidiaries).
MERGER - SUBSIDIARY COMPANIES
During the year under review, following mergers/ amalgamations have taken place:
1. Consumer Financial Services Limited (CIN: U67120DL2001PLC199088) was merged with L&T Housing Finance Limited (CIN: U45200MH1994PLC259630), a wholly owned subsidiary of the Company with effect from October 28, 2016.
2. L&T Finance Limited (CIN: U65990MH1994 PLC083147) and L&T FinCorp Limited (CIN: U65910MH1997PLC108179), the two wholly owned subsidiaries of the Company were merged with Family Credit Limited (now known as L&T Finance Limited -CIN: U65910WB1993FLC060810), another wholly owned subsidiary of the Company with effect from February 13, 2017.
MATERIAL SUBSIDIARIES
As required under Regulations 16(1)(c) and 46 of the Listing Regulations, the Board of Directors has approved the Policy for determining Material Subsidiaries (âPolicyâ). The details of the Policy are available on the website of the Company at http://www.ltfs.com/ investors.html.
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY/ASSOCIATE AND JOINT VENTURE COMPANIES
As required under Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and associates of the Company has been appended as Annexure C to this Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirm that, to the best of their knowledge and belief:
1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for that period;
3) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. Testing of such systems forms a part of review by the Internal Audit function. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter.
The Internal Audit department of LTFS monitors and evaluates the efficacy and adequacy of the internal control system in the Company, and its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of the Internal Audit function, process owners undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee (âACâ) from time to time.
MEETINGS
The details of the Board meetings held during FY 2016-17 are disclosed in the Corporate Governance Report appended to this Report.
COMPOSITION OF AUDIT COMMITTEE
The Company has constituted an AC in terms of the requirements of the Act, Regulation 18 of Listing Regulations and RBI Regulations. The details of the same are disclosed in the Corporate Governance Report.
VIGIL MECHANISM
Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Section 177(9) of the Act, the Company has framed and adopted the Vigil Mechanism Framework to enable directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct.
Under this framework, the Company has set up a âWhistle Blower Investigation Committeeâ. The Chairperson of this Whistle Blower Investigation Committee is the Chief Ethics Officer of the Company responsible for receiving, validating, investigating and reporting to the AC on this matter. The Chief Internal Auditor of LTFS is acting as âChief Ethics Officerâ.
The objective of this mechanism is to maintain a redressal system which can process all complaints concerning questionable accounting practices, internal controls or fraudulent reporting of financial information.
The mechanism framed by the Company is in compliance with the requirements of the Act and Listing Regulations and available on the website of the Company at http://www. ltfs.com/investors.html.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Act, the Company has constituted a Corporate Social Responsibility (âCSRâ) Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report.
The Company has also formulated a CSR Policy which is available on the website of the Company at http://www.ltfs.com/csr.html. An annual report on activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure D to this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY
Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Board of Directors has approved the Policy on transactions with related parties (âRPT policyâ), pursuant to the recommendation of the AC. In line with the requirements of the Act, RBI Regulations and Listing Regulations, the Company has formulated the RPT Policy which is also available on the Companyâs website at http://www.ltfs.com/investors.html. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the related parties.
Key features of the RPT Policy are as under:
- All transactions with related parties (âRPTsâ) are referred to the AC of the Company for approval irrespective of its materiality. The AC, on the recommendation of the management, approves certain RPTs which would occur on a regular basis or at regular intervals. The AC, at the end of each year, appraises the position of the approved transactions to ensure that all necessary requirements are being complied with.
- All RPTs which are not at armâs length and / or which are not in the ordinary course of business are presented to the Board for an appropriate decision.
All RPTs that were entered into during FY 2016-17 were on armâs length basis and were in the ordinary course of business. There were no materially significant RPTs by the Company with Promoters, Directors, KMP or Body Corporate(s), which had a potential conflict with the interest of the Company at large. Accordingly, the disclosure of RPTs as required under the provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable. The Directors draw attention of the Members to Note No. 24.4 to the Financial Statements which sets out related party disclosures.
RISK MANAGEMENT FRAMEWORK
The Company and its subsidiaries have a risk management framework and Board members are informed about risk assessment and minimization procedures and periodical review to ensure management controls risk by means of a properly designed framework. The AC is kept apprised of the proceedings of the meetings of the Risk Management Committee and also apprised about the risk management framework at subsidiaries.
AUDITORSâ REPORT
The Auditorsâ Report to the Members for the year under review does not contain any qualification. The Notes to the Accounts referred to in the Auditorsâ Report are self-explanatory and therefore do not call for any further clarifications under Section 134(3)(f) of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Naina R. Desai, Practising Company Secretary to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report is appended as Annexure E to this Report.
There is no adverse remark, qualification or reservation in the Secretarial Audit Report.
POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work Place. Appropriate reporting mechanisms are in place for ensuring protection against sexual harassment and the right to work with dignity.
During the year under review, the Company has not received any complaints in this regard.
EXTRACT OF ANNUAL RETURN AS REQUIRED AND PRESCRIBED UNDER SECTION 92(3) OF THE ACT AND RULES MADE THEREUNDER
The extract of Annual Return in Form No. MGT-9 as required under Section 92(3) of the Act and prescribed in Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure F to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Further, no penalties have been levied by RBI/any other Regulators during the year under review.
RBI REGULATIONS
The Company has complied with all the applicable regulations of RBI as on March 31, 2017.
OTHER DISCLOSURES
During the year under review, the Company has not obtained any registration/license/authorisation, by whatever name called from any other financial sector regulators.
ACKNOWLEDGEMENT
The Directors express their sincere gratitude to the Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Companyâs bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Companyâs stakeholders and trust reposed by them in your Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company and its subsidiaries across all levels, resulting in successful performance during the year.
For and on behalf of the Board of Directors
Y. M. Deosthalee Dinanath Dubhashi
Chairperson Managing Director &
Chief Executive Officer
DIN: 00001698 DIN:03545900
Place : Mumbai
Date : May 4, 2017
Mar 31, 2015
Dear Members,
The Directors of your Company have pleasure in presenting the Seventh
Annual Report together with the audited financial statements for the
financial year ended March 31, 2015.
Financial Results
The summary of the Company's financial performance, both on a
consolidated and standalone basis, for the financial year 2014-15 as
compared to the previous financial year 2013-14 is given below:
(Rs. in Lakhs)
Consolidated
Particulars 2014-15 2013-14
Total Income 633,744.93 523,718.42
Less: Total Expenses 530,652.08 441,230.35
Profit before exceptional
Items & taxes 103,092.85 82,488.07
Exceptional Items 14,389.42 -
Profit before Tax 117,482.27 82,488.07
Less: Tax Expense 32,410.80 23,003.91
Profit after Tax 85,071.47 59,484.16
Add: Share in profit of associate
company 396.43 205.17
Profit for the year 85,467.90 59,689.33
Add: Balance brought forward from
previous year 84,421.15 84,078.98
Balance Available 169,889.05 143,768.31
Appropriations
Statutory Reserve 18,931.63 16,861.65
Proposed Dividend on Equity Shares 13,762.29 12,888.37
Dividend paid for previous year 5.04 1.29
Dividend Distribution Tax on
proposed dividend / dividend paid 4,955.37 3,656.03
(Including tax on Dividend paid for
previous year)
Interim Dividend on Preference Shares 11,016.53 7,597.50
Redemption premium on Cumulative
Compulsorily
Redeemable Preference Shares 254.60 -
Transfer to/(from) Debenture
Redemption Reserve 2,658.16 11,649.00
Depreciation rate adjustment 313.92 -
Amalgamation adjustments - 51.90
Transfer to Reserve u/s 36(1)(viii)
of Income Tax Act, 1961 4,798.00 6,440.00
Transfer to Reserve u/s 29-C of
National Housing Bank 1,350.00 201.42
Surplus in the Statement of Profit
and Loss 111,843.51 84,421.15
Standalone
Particulars
2014-15 2013-14
Total Income 32,693.19 29,122.67
Less: Total Expenses 7,490.42 9,433.44
Profit before exceptional
Items & taxes 25,202.77 19,689.23
Exceptional Items - -
Profit before Tax 25,202.77 19,689.23
Less: Tax Expense (960.03) 50.92
Profit after Tax 26,162.80 19,638.31
Add: Share in profit of associate
company - -
Profit for the year 26,162.80 19,638.31
Add: Balance brought forward from
previous year 12,918.28 17,698.51
Balance Available 39,081.08 37,336.82
Appropriations
Statutory Reserve 5,233.00 3,928.00
Proposed Dividend on Equity Shares 13,762.29 12,888.37
Dividend paid for previous year 5.04 1.29
Dividend Distribution Tax on
proposed dividend / dividend paid 12.27 3.38
(Including tax on Dividend paid for
previous year)
Interim Dividend on Preference Shares 11,016.53 7,597.50
Redemption premium on Cumulative
Compulsorily
Redeemable Preference Shares - -
Transfer to/(from) Debenture
Redemption Reserve - -
Depreciation rate adjustment - -
Amalgamation adjustments - -
Transfer to Reserve u/s 36(1)(viii)
of Income Tax Act, 1961 - -
Transfer to Reserve u/s 29-C of
National Housing Bank - -
Surplus in the Statement of Profit
and Loss 9,051.95 12,918.28
Financial Performance
Being a Core Investment Company, the Company's standalone revenue is
substantially, dividend from its subsidiaries and hence, it is
meaningful to look at the Consolidated Performance.
Consolidated
* Total income grew by 21% from Rs. 523,718.42 Lakhs in FY 2013-14 to
Rs. 633,744.93 Lakhs in FY 2014-15.
* Profit before exceptional items and taxes has grown from Rs.
82,488.07 Lakhs in FY 2013-14 to Rs. 103,092.85 Lakhs in FY 2014-15.
* Profit After Tax (PAT) excluding exceptional items was Rs. 73,603.00
Lakhs in FY 2014-15 as compared to Rs. 59,689.33 Lakhs in FY 2013-14.
During the year, the net loan book size grew from Rs. 3,869,715.04
Lakhs to Rs. 4,576,313.36 Lakhs reflecting a growth of 18%.
The Average Assets Under Management (AAUM) of the Mutual Fund business
stood at Rs. 2,249,670 Lakhs for the quarter ended March 31, 2015 as
against Rs. 1,825,519 Lakhs for the quarter ended March 31, 2014, a
growth of 23%.
Standalone
* Total income grew from Rs. 29,122.67 Lakhs in FY 2013-14 to Rs.
32,693.19 Lakhs in FY 2014-15.
* Profit before tax has grown from Rs. 19,689.23 Lakhs in FY 2013-14 to
Rs. 25,202.77 Lakhs in FY 2014-15.
* Profit After Tax (PAT) was Rs. 26,162.80 Lakhs in FY 2014-15 as
compared to Rs. 19,638.31 Lakhs in FY 2013-14.
Appropriations
The Company proposes to transfer Rs. 5,233.00 Lakhs (Previous year Rs.
3,928.00 Lakhs) to Special Reserve created u/s 45ÂIC of the Reserve
Bank of India Act, 1934. The Company proposes to transfer Rs.
13,762.29 Lakhs (Previous year Rs. 12,888.37 Lakhs) to Dividend Account
towards payment of proposed dividend on Equity Shares and Rs. 12.27
Lakhs (Previous year Rs. 3.38 Lakhs) towards payment of Dividend
Distribution Tax on the proposed dividend and retain Rs. 9,051.95 Lakhs
(Previous year Rs. 12,918.28 Lakhs) in the Statement of Profit and Loss
of the Company.
Material Changes and Commitments
There were no material changes and commitments affecting the financial
position of the Company which occurred between the end of the financial
year to which these financial statements relate and the date of this
Report.
Dividend
The Board of Directors had declared and paid an interim dividend @
8.75% (two options), 9.00% (one option), 8.40% (one option), 8.50% (one
option) and 8.35% (two options) per share (on pro-rata basis for the
issuance made during the year) as applicable, on the five series of
Cumulative Compulsorily Redeemable Preference Shares (CCRPS) of face
value of Rs. 100/- each of the Company, for the financial year 2014-15,
entailing an outflow of Rs. 11,016.53 Lakhs (excluding Dividend
Distribution Tax). No final dividend is proposed on CCRPS.
The Directors are pleased to recommend a final dividend of Rs. 0.80 per
Equity Share of face value of Rs. 10/- each for the financial year
2014-15, entailing an outflow of Rs. 13,762.29 Lakhs (excluding
Dividend Distribution Tax). The dividend, if approved at the ensuing
Annual General Meeting, would be paid to those members whose name
appear in the Register of Members/Beneficial Holders as on September 2,
2015.
Credit Rating
During the year, Credit Analysis and Research Ltd. (CARE) has accorded
a rating of 'CARE AA ' [Double A Plus] for the various issues of
Redeemable Preference Shares. The rating indicates that the Preference
Shares carry very low credit risk and are considered to have a high
degree of safety regarding timely servicing of financial obligations
and further indicating "Stable" outlook.
Share Capital
During the year under review, to fund the capital requirements of the
subsidiaries from time to time, your Company has issued 36,340,000
Listed Cumulative Compulsorily Redeemable Preference Shares (CCRPS) of
Face Value Rs. 100/- each for cash at par aggregating Rs. 36,340.00
Lakhs on private placement basis. The said shares were issued in
accordance with the SEBI (Issue and Listing of Non-Convertible
Redeemable Preference Shares) Regulations, 2013 (SEBI Regulations).
During the year, the Company has issued in total 18,36,925 Equity
Shares to employees of the Company and its Subsidiary companies
pursuant to their exercise of stock options under ESOP Scheme - 2010.
Pursuant to the above issue of Preference Shares and allotment of
Equity Shares on exercise of employee stock options, the paid-up
capital of your Company increased to Rs. 308,368.59 Lakhs (including
Preference Share Capital of Rs. 136,340.00 Lakhs) as at March 31, 2015
from Rs. 271,844.90 Lakhs as at March 31,2014.
Investment in Subsidiaries
During the year under review, the Company has infused capital in its
following subsidiaries by subscribing to the equity shares offered by
them:
Name of subsidiary company Amount of
capital subscribed
(Rs.in Lakhs)
L&T Capital Markets Limited 600.00
L&T Investment Management 501.82
Limited
Registration as Core Investment Company
The Company is a registered Non-Banking Financial Institution - Core
Investment Company (NBFC-CIC) pursuant to the receipt of Certificate of
Registration from the Reserve Bank of India (RBI) dated September 11,
2013, under Section 45-IA of the Reserve Bank of India Act, 1934.
Statutory Disclaimer
The Company is having a valid Certificate of Registration dated
September 11, 2013 issued by the Reserve Bank of India under Section
45-IA of the Reserve Bank of India Act, 1934. However, the RBI does
not accept any responsibility or guarantee about the present position
as to the financial soundness of the Company or for the correctness of
any of the statements or representations made or opinions expressed by
the Company and for repayment of deposits / discharge of liabilities
by the Company.
Fixed Deposits
The Company has not accepted any deposits from the public since
inception.
Directors
During the year under review, Mr. B. V. Bhargava, Mr. S. V Haribhakti,
Mr. P V. Bhide, Ms. Kamakshi Rao and Mr. Harsh Mariwala, who had
offered themselves for appointment as Independent Directors (IDs) and
who were qualified for the said position, pursuant to Section 149(6) of
the Companies Act, 2013 (the Act), were appointed as IDs by the Members
at their Sixth Annual General Meeting held on July 24, 2014, to hold
office for a period upto March 31, 2019.
During the year under review, Mr. A. K. Jain, a Non-Executive Director,
resigned from the Board of Directors to devote time to other
commitments and accordingly ceased to be a Director of the Company with
effect from February 26, 2015. The Board places on record its
appreciation of the valuable services rendered by him during his tenure
as a Director of the Company.
The provisions of Section 149(1) and 149(4) of the Act, pertaining to
the appointment of a Woman Director and Independent Directors have been
notified by the Ministry of Corporate Affairs with effect from April 1,
2014. The revised Clause 49 of the Equity Listing Agreement notified by
SEBI with effect from October 1, 2014 also mandated appointment of a
Woman director in addition to Independent Directors. As at March 31,
2015, the Company has five Independent Directors including one Woman
Director.
The Company has familiarized the Independent Directors with the
Company, their roles, responsibilities in the Company, nature of
industry in which the Company operates, business model of the Company,
etc. The details of the familiarization programme is available on the
website of the Company at http://www.ltfinanceholdings.
com/investors/corporate-governance.aspx.
All Independent Directors have given declarations that they meet the
criteria of independence as provided under Section 149 (6) of the Act
and Clause 49 of the Equity Listing Agreement. Further, all the
Directors meet the Fit and Proper criteria stipulated by the RBI
pursuant to the revised regulatory framework notified during the year.
The terms and conditions of appointment of Independent Directors is
also available on the website of the Company at
http://www.ltfinanceholdings.com/ investors/corporate-governance.aspx.
Section 152 of the Act provides that unless the articles provide for
the retirement of all directors at every annual general meeting, not
less than two-third of the total number of directors of a public
company shall be persons whose period of office is liable to
determination by retirement of directors by rotation. For the purpose
of determining the total number of directors, Independent Directors are
required to be excluded. Accordingly, Mr. N. Sivaraman, President &
Whole-time Director will retire by rotation at the ensuing Annual
General Meeting (AGM) and being eligible, has offered himself for
re-appointment.
The Directors of the Company have affirmed compliance with the Code of
Conduct of the Company.
Additional Information and brief profile, as stipulated under the
Equity Listing Agreement with respect to the Director seeking
re-appointment, is annexed to the Notice of the AGM. Further, the
business items relating to the re-appointment of above Director have
been included in the Notice of the AGM.
Key Managerial Personnel
During the year under review, Mr. C. S. Damle resigned as the Chief
Financial Officer of the Company for pursuing alternate career
opportunities. As on March 31,2015, the Company has the following Key
Managerial Personnel:
1) Mr. Y. M. Deosthalee - Chairman & Managing Director
2) Mr. N. Sivaraman - President & Whole-time Director
3) Mr. N. Suryanarayanan - Company Secretary
The Board of Directors, at its meeting held on April 23, 201 5 has, on
the recommendation of the Audit Committee, appointed Ms. Upma Goel,
Deputy Finance Controller and a Chartered Accountant with over 22 years
experience, as a Key Managerial Person to discharge the functions of
the Chief Financial Officer.
Company's Policy on Director Appointment and Remuneration
A. Background and Objectives
Section 178 of the Companies Act, 2013 ('the Act') as well as Clause 49
of the Equity Listing Agreement (Listing Agreement) require the
Nomination and Remuneration Committee to formulate a Policy relating to
the remuneration of the Directors, Key Managerial Personnel (KMP),
Senior Management and other employees of the Company and recommend the
same for approval of the Board. Further, Section 178(4) of the Act and
Clause 49 of the Listing Agreement stipulate that the policy shall be
disclosed in the Board's Report.
Moreover, Section 134 of the Act stipulates that the Board's Report
shall include a statement on Company's Policy on directors' appointment
and remuneration including criteria for determining qualifications,
positive attributes, independence of director and remuneration for key
managerial personnel and other employees.
The Board of Directors at its meeting held on February 25, 2015, has,
based on the recommendation of the Nomination and Remuneration
Committee, approved the Policy on Directors' Appointment and
Remuneration for Directors, Key Managerial Personnel and other
Employees.
B. Brief Framework of the Policy
a) The objective of this Policy is
* To guide the Board in relation to appointment and removal of
Directors.
* To evaluate the performance of the Members of the Board including
Independent Directors.
* To formulate the criteria for evaluation of Independent Director and
the Board.
* To determine criteria for payment of remuneration to Directors, Key
Managerial Personnel, Senior Management and Employees.
* To recommend to the Board on remuneration payable to the Directors
including Key Managerial Personnel, Senior Management and Employees, if
required.
b) Evaluation Criteria of Directors and Senior Management/Key
Managerial Personnel/ Employees
* Non-Executive Directors/Independent Directors
Before determining the remuneration, the Nomination and Remuneration
Committee ('the Committee') is required to carry out evaluation of
performance of Independent Directors/Non-Executive Directors, against
the following criteria:
* Membership & Attendance - Board and Committee Meetings.
* Contribution during such meetings.
* Active participation in strategic decision making.
* Inputs to executive management on matters of strategic importance.
* Executive Directors
With respect to evaluation of performance of Executive Directors, the
evaluation is on the basis of Key Performance Indicators (KPI), which
would be identified every year for Executive Directors (ED) and weights
assigned for each measure of performance keeping in view the distinct
roles of each ED. The identified KPI for Executive Directors shall be
approved by the Board, pursuant to the recommendation of the Nomination
and Remuneration Committee.
* Senior Management/Key Managerial Personnel/Employees
The Human Resource Department (HR Department) would assign the
responsibility of carrying out the evaluation of the aforementioned
persons every year ending March 31st, to the reporting
superior/department heads. KPI are identified well in advance at the
commencement of the financial year. Performance benchmarks are set and
evaluation of employees is done by the respective reporting
manager(s)/Management vis-a-vis the performance benchmarks. The payment
of remuneration/annual increment to the aforementioned persons is
determined after the satisfactory completion of Evaluation process.
The HR Department of the Company is authorized to design the framework
for evaluating the KMPs/Senior Management Personnel/Employees. The
objective of carrying out the evaluation by the Company is to identify
and match rewards with performance.
c) Criteria for Remuneration
In determining the criteria for remuneration for Directors and Senior
Management, the Nomination and Remuneration Committee is required to
ensure that:
1) the relationship between remuneration and performance benchmark is
clear;
2) there is a balance between fixed and incentive pay reflecting short
and long term performance objectives, appropriate to the working of the
Company and its goals;
3) the remuneration is divided into two components viz. fixed component
comprising salaries, perquisites and retirement benefits and a variable
component comprising performance bonus;
4) the remuneration including annual increment and performance bonus is
decided based on the criticality of the roles and responsibilities, the
Company's performance vis-a-vis the annual budget achievement,
individuals performance vis-a-vis KRAs / KPIs, industry benchmark and
current compensation trends in the market.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 (the Act) and
Clause 49 of the Equity Listing Agreement, the Board has carried out an
annual performance evaluation of its own performance, the directors
individually, as well as the Audit Committee (AC) and Nomination and
Remuneration Committee (NRC).
Manner of Evaluation
The NRC and the Board have laid down the manner in which formal annual
evaluation of the performance of the Board, Committees and individual
Directors has to be made.
It includes circulation of evaluation forms separately for evaluation
of the Board and its Committees, Independent Directors/Non-Executive
Directors/Executive Director and Chairman of the Company.
The process of the annual performance evaluation broadly comprises:
a) Board Evaluation:
* Evaluation of the Board as a whole by the Business Heads and
individual Board members, followed by collation thereof by NRC for
apprising the Board
b) Audit Committee and Nomination and Remuneration Committee
Evaluation:
* Evaluation of the Committees by the respective Committee members,
followed by compilation thereof by NRC for submission to the Board
c) Independent / Non-Executive Directors Evaluation:
* Evaluation by other Board members excluding the Director being
evaluated, followed by individual feedback to the directors concerned
by the Chairman of the Board and summary feedback to the NRC.
d) Chairman Evaluation:
* Evaluation by the other members of the Board followed by feedback
thereon by the Chairman of the NRC to the Chairman of the Board and
apprising the Board.
e) Evaluation of President & Whole-time Director:
* Evaluation by the other members of the Board followed by feedback
thereon by the Chairman of the Board to the director concerned and
apprising the NRC and Board.
Employee Stock Option Scheme
The disclosures required to be made under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 as amended from time to time,
together with a certificate obtained from the Statutory Auditors,
confirming compliance thereto, has been appended as Annexure A forming
part of this Report.
Reports on Corporate Governance
The Report on Corporate Governance for the year under review, is
forming part of the Annual Report. The certificate from the Auditors
of the Company confirming compliance with the conditions of Corporate
Governance is annexed to the Corporate Governance Report.
Statutory Auditors
The Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office
until the conclusion of the ensuing Annual General Meeting (AGM) and
are recommended for re-appointment.
Pursuant to Section 139(2) of the Companies Act, 2013 (the Act) and the
rules made thereunder, no listed company shall appoint or re-appoint an
audit firm as auditor for more than two terms of five consecutive
years. The aforesaid appointment is subject to ratification by Members
of the Company at every AGM.
Further, the proviso to the said Section 139(2) stipulates that every
company existing on or before the commencement of the Act, has to
comply with the requirements of this Section within three years from
the date of commencement of this Act. The Audit Committee and Board of
Directors of the Company have recommended the appointment of M/s. Sharp
& Tannan, Chartered Accountants as Statutory Auditors for a further
period of one year i.e. from the conclusion of the Seventh AGM till the
conclusion of the Eighth AGM, subject to the approval of the Members in
the ensuing AGM of the Company. For the information of Members, M/s.
Sharp & Tannan has already served as Statutory Auditors of the Company
for a period of seven years.
M/s. Sharp & Tannan have confirmed that their re-appointment, if made,
will comply with the eligibility criteria in terms of Section 141(3) of
the Act. Further, the Auditors have confirmed that they have subjected
themselves to Peer Review process by the Institute of Chartered
Accountants of India (ICAI) and hold valid certificate Issued by the
Peer Review Board of ICAI.
Particulars of Employees
The information required pursuant to Section 197 of the Act read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company has been
appended as Annexure B of this Report. In terms of first proviso to
Section 136 of the Act, the Report and Accounts are being sent to the
Members and others entitled thereto, excluding the information on
employees' particulars as required pursuant to Rule 5(2) and 5(3) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014. The said information is available for inspection by the
Members at the Registered Office of the Company during business hours
on working days of the Company up to the date of the ensuing Annual
General Meeting. If any Member is interested in obtaining a copy
thereof, such Member may write to the Company Secretary in this regard.
The Board of Directors affirm that the remuneration paid to employees
of the Company is as per the Remuneration Policy of the Company and
none of the employees listed in the said Annexure/Information is
related to any Director of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo Considering the Company's activities as a Core
Investment Company carrying out its activities through its
subsidiaries, the particulars regarding conservation of energy &
technology absorption as required to be disclosed pursuant to the
Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant
to its activities.
There were no foreign exchange earnings during the year (Previous year
Rs. Nil); the foreign exchange used by the Company during the year was
Rs. 202.17 Lakhs (Previous year Rs. 196.48 Lakhs) towards professional
fees, Directors' sitting fees and travelling expenses.
Depository System
As the Members are aware, the Company's equity shares are compulsorily
tradable in electronic form. As on March 31, 2015, out of the Company's
total equity paid-up capital comprising of 1,720,285,900 Equity Shares,
only 224,746 Equity Shares were in physical form and the remaining
capital is in electronic form. In view of the numerous advantages
offered by the Depository System, the Members holding shares in
physical form are advised to avail of the facility of
dematerialization.
Subsidiary Companies
The Company conducts its business through subsidiaries for each of the
business segment in which it operates. As of March 31,2015, the
Company had 15 subsidiaries (including step down subsidiaries), which
is summarized in the diagram below:
During the year under review, as part of the corporate restructuring
exercise, L&T Trustee Services Pvt. Ltd. was merged with L&T Mutual
Fund Trustee Ltd. in order to create better synergies across the group,
optimal utilisation of resources and reduction in regulatory and legal
compliances/filings.
The Scheme of Arrangement has been sanctioned by the Honourable High
Court of Judicature at Bombay vide its Order dated August 27, 2014.
By virtue of the above, L&T Trustee Services Pvt. Ltd. ceased to be a
step down subsidiary of the Company.
Material Subsidiaries
As required under the Clause 49(V)D of the Equity Listing Agreement,
the Board of Directors at its meeting held on October 22, 2014 has
approved the Policy for determining Material Subsidiaries ('Policy').
The details of the Policy are available on the website of the Company
at http://www. ltfinanceholdings.com/
investors/corporate-governance.aspx.
Performance and Financial Position of each subsidiary/associate and
joint venture companies As required under Rule 5 and Rule 8(1) of the
Companies (Accounts) Rules, 2014, a report on the performance and
financial position of each of the subsidiaries and associates of the
Company has been appended as Annexure C to this Report.
The Company does not have any overseas subsidiaries. Directors'
Responsibility Statement The Board of Directors of the Company confirms
that:
1) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
2) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31,2015 and of the profit of the Company for
that period;
3) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4) the directors had prepared the annual accounts on a going concern
basis;
5) the directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and operating effectively;
6) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Internal Control Systems and their Adequacy
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. Testing of such Control Systems
form a part of Internal Audit functions. The scope and authority of the
Internal Audit (IA) function is defined in the Internal Audit Charter.
To maintain its objectivity and independence, the Internal Audit
function reports to the Chairman & Managing Director and functionally
to the Audit Committee. The Internal Audit functions are carried out
by the Internal Audit department of L&T Financial Services Group.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies of the Company.
Based on the report of the internal audit function, process owners
undertake corrective action, if any, in their respective areas and
thereby strengthen the controls. Significant audit observations and
corrective actions, if any, are presented to the Audit Committee of the
Board.
Meetings
The details of the Board meetings held by the Company during the
financial year 2014-15 are disclosed in the Corporate Governance Report
annexed along with this Report.
Composition of Audit Committee
The Company has constituted an Audit Committee in terms of the
requirements of the Companies Act, 2013, Clause 49 of Equity Listing
Agreement and regulations of the Reserve Bank of India. The details of
the same are disclosed in the Corporate Governance Report.
Vigil Mechanism
The Company has formulated and established a Vigil Mechanism Framework
to enable directors and employees to report genuine concerns about
unethical behaviour, actual or suspected fraud or violation of Code of
Conduct. Under this framework, the Company has set up a "Whistle Blower
Investigation Committee ("the Committee")". The Chairman of this
Whistle Blower Investigation Committee is the Chief Ethics Officer of
the Company responsible for receiving, validating, investigating and
reporting to the Audit Committee of this matter. The Chief Internal
Auditor of L&T Financial Services Group acts as 'Chief Ethics Officer'.
The objective of this mechanism is to maintain a redressal system which
can process all complaints concerning questionable accounting
practices, internal controls, or fraudulent reporting of financial
information.
The mechanism framed by the Company is in compliance with the
requirements of the Companies Act, 2013 and Equity Listing Agreement
and available on the website of the Company at http://www.
ltfinanceholdings.com/ investors/corporate-governance.aspx
Corporate Social Responsibility (CSR)
In accordance with the requirements of Section 135 of the Companies
Act, 2013, the Company has constituted a CSR Committee. The composition
and terms of reference of the CSR Committee is provided in the
Corporate Governance Report.
The Company has also formulated a CSR Policy which is available on the
website of the Company at http://www.ltfinanceholdings.com/investors/
corporate -governance.aspx. Annual Report on CSR activities as required
under the Companies (Corporate Social Responsibility Policy) Rules,
2014 has been appended as Annexure D to this Report.
Particulars of Loans given, Investments made, Guarantees given or
security provided by the Company:
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
Notes to the Financial Statements.
Particulars of Contracts or Arrangements with Related Parties:
The Board of Directors at its meeting held on June 20, 2014 has
approved the Policy on Related Party Transactions (RPT Policy),
pursuant to the recommendation of the Audit Committee. In line with the
requirements of the Companies Act, 2013, RBI Regulations and Equity
Listing Agreement, the Company has formulated a Policy on Related Party
Transactions which is also available on the Company's website at
http://www.ltfinanceholdings. com/investors/corporate-governance.aspx.
The Policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions between the
Company and Related Parties.
Key features of the RPT Policy are as under:
* All RPT's should be referred to the Audit Committee of the Company
for approval irrespective of its materiality. The Audit Committee, on
the recommendation of the management, will approve certain transactions
with related parties which would occur on regular basis or at regular
intervals. The Audit Committee shall, at the end of each year appraise
the position of the approved transactions to ensure that all necessary
requirements are being complied with.
* All RPT's which are not at arm's length and / or which are not in the
ordinary course of business should be presented to the Board for an
appropriate decision.
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel, Body Corporate(s), which had a potential conflict
with the interest of the Company at large. Accordingly, the disclosure
of Related Party Transactions as required under Section 134(3) (h) of
the Companies Act, 2013 in Form AOC 2 is not applicable. The Directors
draw attention of the members to Note No. 24.4 to the Financial
Statements which sets out related party disclosures.
Risk Management Framework
The Company and its subsidiaries have a risk management framework to
inform the Board Members about risk assessment and minimization
procedures and periodical review to ensure that executive management
controls risk by means of a properly designed framework. The Audit
Committee is kept apprised of the proceedings of the Risk Management
Committee and also apprised about the risk management framework at
subsidiaries.
Auditors' Report
The Auditors' Report is unqualified. The Notes to the Accounts referred
to in the Auditors' Report are self-explanatory and therefore do not
call for any further clarifications under Section 134(3)(f) of the
Companies Act, 2013.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Ms. Naina R. Desai,
Practising Company Secretary to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report is appended as Annexure E to this
Report.
There is no adverse remark, qualifications or reservation in the
Secretarial Audit Report.
Policy for Prevention, Prohibition and Redressal of Sexual Harassment
at Workplace
The Company has in place a Policy for Prevention, Prohibition and
Redressal of Sexual Harassment at Work Place. Appropriate reporting
mechanisms are in place for ensuring protection against Sexual
Harassment and the right to work with dignity. During the year under
review, the Company has not received any complaints in this regard.
Extract of Annual Return as required and prescribed under Section 92(3)
of the Companies Act, 2013 and Rules made thereunder
The extract of Annual Return in MGT 9 as required under Section 92(3)
of the Companies Act, 2013 and prescribed in Rule 12 of the Companies
(Management and Administration) Rules, 2014 is appended as Annexure F
to this Report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and
its future operations. Further, no penalties have been levied by
RBI/any other Regulators during the year under review.
Reserve Bank of India Regulations
The Company has complied with all the applicable regulations of the
Reserve Bank of India as on March 31, 2015.
Other Disclosures
During the year under review, the Company has not obtained any
Registration/licence/authorisation, by whatever name called from other
financial sector regulators.
Market Capitalisation/Price Earnings Ratio/ Percentage
increase/decrease in the market quotations
a. Variations in the market capitalisation of the Company: The market
capitalisation as on March 31, 2015 was Rs. 10,803.40 Crore
(Rs. 12,639.19 Crore as on March 31, 2014).
b. Price Earnings Ratio of the Company was 14.60 as at March 31, 2015
and was 24.29 as at March 31, 2014. Considering the Company being a
non-operating Core Investment Company which carries on the business
through its underlying subsidiaries, the performance of the Company
would be aptly reflected by its consolidated earnings. Hence, the
P/E Ratio has been computed on the basis of consolidated performance.
c. Percent increase over/ decrease in the market quotations of the
shares of the Company as compared to the rate at which the Company came
out with the last public offer. The closing share price of the Company
at National Stock Exchange of India Limited on March 31, 2015 being Rs.
62.80 per equity share of face value of Rs. 10/- each has grown 1.21
times, since the Company's Initial Public Offer made in the year 2011
(Offer Price was Rs. 52/- per equity share of face value of Rs. 10/-
each).
Acknowledgement
The Directors express their sincere gratitude to the Reserve Bank of
India, Securities and Exchange Board of India, BSE Limited, National
Stock Exchange of India Limited, Ministry of Finance, Ministry of
Corporate Affairs, Registrar of Companies, other government and
regulatory authorities, lenders, financial institutions and the
Company's bankers for the ongoing support extended by them. The
Directors also place on record their sincere appreciation for the
continued support extended by the Company's stakeholders and trust
reposed by them in your Company. The Directors sincerely appreciate the
commitment displayed by the employees of the Company and its
subsidiaries across all levels, resulting in successful performance
during the year.
For and on behalf of the Board of Directors
Y. M. Deosthalee N. Sivaraman
Chairman & Managing President &
Director Whole-time Director
Place : Mumbai
Date : April 23, 2015
Mar 31, 2014
Dear Members,
The Directors of your Company take pleasure in
presenting the Sixth Annual Report together with the
annual audited statement of accounts for the financial
year ended March 31, 2014.
Financial Results
The summarized financial results of the Company are
given hereunder:
(Rs. in Lakhs)
Particulars 2013-14 2012-13
Total Income 29,122.67 20,067.22
Less: Total Expenses 9,433.44 6,894.06
Profit before Exceptional Items 19,689.23 13,173.16
Exceptional items * - 23,572.92
Profit before Tax 19,689.23 36,746.08
Less: Tax Expense 50.92 5,613.56
Profit after Tax 19,638.31 31,132.52
Add: Balance brought forward 17,698.51 5,933.84
from previous year
Balance Available 37,336.82 37,066.36
Appropriations
Statutory Reserve 3,928.00 6,250.00
Proposed Dividend on - 150.00
Preference Shares
Proposed Dividend on Equity 12,888.37 12,875.70
Shares
Dividend paid for previous year 1.29 -
Dividend Distribution Tax on 3.38 92.15
proposed dividend / dividend
paid
Interim Dividend on Preference 7,597.50 -
Shares
Surplus in the Statement of 12,918.28 17,698.51
Profit and Loss
* Exceptional items represent profit on sale of investments net of
costs related to integration of acquired entities.
Appropriations
The Company proposes to transfer Rs. 3,928.00 lakhs (Previous year Rs.
6,250.00 lakhs) to Special Reserve created u/s 45ÂIC of the Reserve
Bank of India Act, 1934.
The Company proposes to transfer Rs. 12,888.37 lakhs (Previous year Rs.
12,875.70 lakhs) to Dividend Account towards payment of proposed
dividend on Equity Shares and Rs. 3.38 lakhs (Previous year Rs. 92.15
lakhs) towards payment of Dividend Distribution Tax (including for
dividend paid for the previous year) on the proposed dividend and
retain Rs. 12,918.28 lakhs (Previous year Rs. 17,698.51 lakhs) in the
Statement of Profit and Loss of the Company.
Dividend
The Board of Directors had declared and paid an interim dividend @
8.75% (two series) and 9.00% per share (on pro-rata basis for the
issuance made during the year) as applicable, on the three series of
Cumulative Compulsorily Redeemable Preference Shares of face value of Rs.
100/- each of the Company for the financial year 2013-14, entailing an
outflow of Rs. 7,597.50 lakhs (excluding Dividend Distribution Tax).
The Directors are also pleased to recommend a final dividend of Rs. 0.75
per Equity Share of face value of Rs. 10/- each for the financial year
2013-14, entailing an outflow of Rs. 12,888.37 lakhs (excluding Dividend
Distribution Tax).
The dividend, if approved at the ensuing Annual General Meeting, would
be paid to those members whose name appear in the Register of
Members/Beneficial Holders as on July 21, 2014.
Consolidated Financial Statements
The Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Clause 32 of the Equity Listing Agreement
entered into with the Stock Exchanges and prepared in accordance with
the Accounting Standards prescribed by the Institute of Chartered
Accountants of India in this regard. The Auditors'' Report to the
Shareholders thereupon does not contain any qualification.
- Total income grew by 31% from Rs. 3,99,479.32 lakhs in FY 2012-13 to Rs.
5,23,718.42 lakhs in FY 2013-14.
- Profit before exceptional and extraordinary items and taxes has grown
from Rs. 77,061.47 lakhs in FY 2012-13 to Rs. 82,488.07 lakhs in FY
2013-14.
- Profit After Tax (PAT) was Rs. 59,484.16 lakhs in FY 2013-14 compared
to Rs. 72,918.77 lakhs in FY 2012-13 due to exceptional income in FY
2012-13 and higher credit costs in the year under review, mainly due to
the economic scenario affecting the infrastructure and other corporate
sectors.
During the year, the loan book size grew from Rs. 32,20,000.00 lakhs to Rs.
38,96,714.04 lakhs reflecting a growth of 20%.
The Average Assets Under Management (AAUM) of the Mutual Fund business
stood at Rs. 18,25,518.65 lakhs for the quarter ended March 31, 2014 as
against Rs. 11,16,937.84 lakhs for the quarter ended March 31, 2013, a
growth of 63%.
Share Capital
During the year under review, to fund the capital requirements of the
subsidiaries from time to time, your Company has issued 2,50,00,000
Listed 9% Cumulative Compulsorily Redeemable Preference Shares (CRPS)
of Face Value Rs. 100/- each for cash at par aggregating Rs. 25,000.00
lakhs on private placement basis. The said shares were issued in
accordance with the SEBI (Issue and Listing of Non-convertible
Redeemable Preference Shares) Regulations, 2013 (SEBI Regulations).
The Preference Shares issued by your Company are the first such
instruments to be issued on a private placement basis and listed
pursuant to SEBI Regulations.
During the year, the Company has issued in total 16,88,443 Equity
Shares to employees of the Company and its Subsidiary companies
pursuant to their exercise of stock options under ESOP Scheme - 2010.
Pursuant to the above issue of Preference Shares and allotment of
Equity Shares pursuant to exercise of employee stock options, the
paid-up capital of your Company increased to Rs. 2,71,844.90 lakhs
(including Preference Share Capital of Rs. 1,00,000.00 lakhs) as at March
31, 2014 from Rs. 2,46,676.05 lakhs as at March 31, 2013.
Investment in Subsidiaries
During the year under review, your Company has infused capital in its
following subsidiaries by subscribing to the equity shares offered by
them :
Name of subsidiary Amount of capital
company subscribed
(Rs. in lakhs)
L&T FinCorp Ltd. 25,000.00
L&T Housing Finance Ltd. 15,000.00
Family Credit Ltd. 10,000.00
L&T Infra Debt Fund Ltd. 7,100.00
L&T Vrindavan Properties Ltd. 1,425.00
(formerly L&T Unnati Finance
Ltd.)
L&T Capital Markets Ltd. 1,420.00
L&T Mutual Fund Trustee Ltd. 10.00
Registration as Core Investment Company
Your Company is now a registered Non-Banking Financial Institution -
Core Investment Company (NBFC- CIC) pursuant to the receipt of
Certificate of Registration from the Reserve Bank of India (RBI) dated
September 11, 2013, under Section 45-IA of the Reserve Bank of India
Act, 1934.
Statutory Disclaimer
The company is having a valid Certificate of Registration dated
September 11, 2013 issued by the Reserve Bank of India under Section
45-IA of the Reserve Bank of India Act, 1934. However, the RBI does not
accept any responsibility or guarantee about the present position as to
the financial soundness of the company or for the correctness of any of
the statements or representations made or opinions expressed by the
company and for repayment of deposits / discharge of liabilities by the
company.
Fixed Deposits
The Company has not accepted any deposits from the public since
inception.
Directors
During the year, Mr. R. Gopalakrishnan, Mr. Subramaniam N. and Mr. M.
Venugopalan resigned from the Board of
Directors and accordingly ceased to be Directors of your Company with
effect from August 1, 2013. The Board places on record its appreciation
of the valuable services rendered by them during their tenure as
Directors of the Company.
Prior to the coming into force of Section 149 of the Companies Act,
2013, six of the Company''s Directors, Mr. A. K. Jain, Mr. B. V.
Bhargava, Mr. S. V. Haribhakti, Mr. P. V. Bhide, Mr. Harsh Mariwala and
Ms. Kamakshi Rao were categorised as Independent Directors in terms of
the definition contained in the Equity Listing Agreement.
The provisions of Section 149(4) of the Companies Act, 2013, pertaining
to the appointment of Independent Directors have been notified by the
Ministry of Corporate Affairs with effect from April 1, 2014. Pursuant
to the coming into force of Section 149 of the Companies Act, 2013,
from April 1, 2014, the Company has re-assessed the status of its
Directors with a view to determining their qualifying for
classification as Independent Directors in terms of Section 149(6) of
the Companies Act, 2013. Accordingly, Mr. B. V. Bhargava, Mr. S. V.
Haribhakti, Mr. P. V. Bhide, Mr. Harsh Mariwala and Ms. Kamakshi Rao
fulfil the criteria laid out in Section 149(6) of the Companies Act,
2013, in this regard.
Section 149(10) of the Companies Act, 2013, restricts the tenure of
Independent Director to two terms of up to ten years, with a single
term not exceeding five years, which shall be effective from April 1,
2014. The revised Clause 49 of the Equity Listing agreement issued by
Securities and Exchange Board of India (SEBI), pursuant to Circular no.
CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014, also contains the same
provisions. Mr. B. V. Bhargava, Mr. S. V. Haribhakti, Mr. P. V. Bhide
and Ms. Kamakshi Rao retire by rotation at the forthcoming Annual
General Meeting (AGM) and, they, being eligible, have offered
themselves for appointment as Independent Directors of your Company
pursuant to the provisions of the Companies Act, 2013, to hold office
for a period upto March 31, 2019.
Pursuant to the provisions of Section 161 of the Companies Act, 2013,
read with the relevant provision in the Articles of Association, Mr.
Harsh Mariwala was appointed as an Additional Director by the Board of
Directors of the Company with effect from October 23, 2013. He holds
office as a Director up to the date of the forthcoming AGM. Your
Company has received a notice in writing from a Member proposing his
candidature for the office of Independent Director. Mr. Mariwala
qualifies to be an Independent Director pursuant to the provisions of
Section 149(6) of the Companies Act, 2013.
Additional Information and brief profile, as stipulated under the
Equity Listing Agreement for each of the above Directors seeking
re-appointment / appointment, is annexed to the Notice of the AGM.
Further, the business items relating to the re-appointment /
appointment of above Directors have been included in the Notice of the
AGM.
Employee Stock Option Scheme
The disclosures required to be made under Clause 12.1 of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999, as amended from time to time,
together with a certificate obtained from the Statutory Auditors,
confirming compliance thereto, are provided in Annexure A forming part
of this Report.
The Company has also instituted a revised Employee Stock Option Scheme
of the Company, known as Employee Stock Option Scheme  2013 (ESOP
Scheme  2013), which was approved by the Members vide postal ballot in
Apr''14.
Report on Corporate Governance and Management Discussion & Analysis
The report on Corporate Governance and Management Discussion & Analysis
for the year under review, are forming part of the Annual Report. The
certificate from the Auditors of the Company confirming compliance with
the conditions of Corporate Governance is annexed to the Corporate
Governance Report.
Statutory Auditors
The Auditors, M/s. Sharp & Tannan, Chartered Accountants, hold office
until the conclusion of the ensuing Annual General Meeting and are
recommended for re-appointment.
The Ministry of Corporate Affairs has notified the provisions of
Section 139 of the Companies Act, 2013, for appointment of Auditors,
which is effective from April 1, 2014. Pursuant to Section 139(2) of
the Companies Act, 2013 and the rules made thereunder, no listed
company shall appoint or re-appoint an audit firm as auditor for more
than two terms of five consecutive years. Further, the aforesaid
appointment is subject to ratification by the Members of the Company at
every AGM.
The period of ten years (two terms of five years each) has to be
calculated from the date of appointment of the auditors. Further, the
proviso to said Section 139(2) stipulates that every company existing
on or before the commencement of the Companies Act, 2013, has to comply
with the requirements of this section within three years from the date
of commencement of this Act. M/s. Sharp & Tannan has already served as
Statutory Auditors of the Company for a term of five years.
Pursuant to Section 139(2) of the Companies Act, 2013, the Audit
Committee and Board of Directors of the Company have recommended their
appointment for a period of one year i.e from the conclusion of the
Sixth AGM till the conclusion of the Seventh AGM, subject to approval
of the Members in the AGM of the Company. M/s. Sharp & Tannan have
confirmed that their re- appointment, if made, will comply with the
eligibility criteria in terms of Section 141(3) of the Companies Act,
2013.
Particulars of Employees
In accordance with the provisions of Section 217(2A) of the Companies
Act, 1956 and the rules framed thereunder, the names and other
particulars of employees are set out in the Annexure II to the
Directors'' Report. In terms of the provisions of Section 219(1)(b)(iv)
of the Companies Act, 1956, the Directors'' Report is being sent to all
the shareholders of the Company excluding the aforesaid information.
The said Annexure is available for inspection at the registered office
of the Company. Any shareholder interested in the said information may
write to the Company Secretary at the Registered Office of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
In view of the nature of activities being carried on by the Company,
Rules 2A and 2B of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, concerning conservation of
energy and technology absorption respectively, are not applicable to
the Company.
There were no foreign exchange earnings during the year (Previous year
Rs. Nil); the foreign exchange used by the Company during the year was Rs.
196.48 lakhs (Previous year Rs. 168.11 lakhs) towards professional fees,
Directors'' sitting fees and travelling expenses.
Depository System
As the Members are aware, the Company''s equity shares are compulsorily
tradable in electronic form. As on March 31, 2014, out of the Company''s
total equity paid-up capital comprising of 1,71,84,48,975 shares, only
14,915 shares were in physical form and the remaining capital is in
electronic form. In view of the numerous advantages offered by the
Depository system, the Members holding shares in physical form are
advised to avail of the facility of dematerialization.
Subsidiary Companies
As of March 31, 2014, the Company had 16 subsidiaries (including step
down subsidiaries), which is summarized in the diagram below:
As per the provisions of Section 212 of the Companies Act, 1956, the
Company is required to attach, inter alia, the Directors'' Report,
Balance Sheet and Statement of Profit and Loss of the subsidiaries to
its annual report. The Ministry of Corporate Affairs, Government of
India vide its circular No. 2/2011 dated February 8, 2011 has provided
an exemption to companies from complying with the provisions of Section
212 subject to fulfillment of certain conditions as mentioned in the
said circular. Accordingly, the annual report of the Company for the
FY 2013-14 does not contain the financial statements of the
subsidiaries. As required under the aforesaid circular, the
consolidated financial statements of the Company duly audited by the
statutory auditors form part of this Annual Report. Your Company shall
make available the audited annual accounts and related information of
its subsidiaries, to those members who wish to have copies of the same
and these documents will also be kept open for inspection by any member
at the Registered Office of the Company on any working day, except on
Saturdays,
Sundays & Holidays between 11.00 a.m. and 1.00 p.m. up to the date of
the ensuing Annual General Meeting.
During the year under review, as part of management restructuring
exercise, L&T Fund Management Pvt. Ltd. (erstwhile FIL Fund Management
Private Ltd.) was merged with L&T Investment Management Ltd. in order
to create better synergies across the group, optimal utilisation of
resources and reduction in regulatory and legal compliances/filings.
The Scheme of Arrangement has been sanctioned by the Honorable High
Court of Judicature at Bombay vide its Order dated October 25, 2013.
Directors'' Responsibility Statement
The Board of Directors of the Company confirms that:
1) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departures;
2) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2014 and of the profit of the Company
for the year ended on that date;
3) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4) the annual accounts have been prepared on a going concern basis; and
5) proper systems are in place to ensure compliance of all laws
applicable to the Company.
Auditors'' Report
The Auditors'' Report is unqualified. The notes to the Accounts referred
to in the Auditors'' Report are self- explanatory and therefore do not
call for any further clarifications under Section 217(3) of the
Companies Act, 1956.
Reserve Bank of India Regulations
The Company has complied with all the applicable regulations of the
Reserve Bank of India as on March 31, 2014.
Acknowledgement
Your Directors express their sincere gratitude to the Reserve Bank of
India, Securities and Exchange Board of India, BSE Limited, National
Stock Exchange of India Limited, Ministry of Finance, Ministry of
Corporate Affairs, Registrar of Companies, other government and
regulatory authorities, lenders, financial institutions and the
Company''s bankers for the ongoing support extended by them. The
Directors also place on record their sincere appreciation for the
continued support extended by the Company''s stakeholders and trust
reposed by them in your Company. Your Directors sincerely appreciate
the commitment displayed by the employees of the Company and its
subsidiaries across all levels, resulting in successful performance
during the year.
For and on behalf of the Board of Directors
Y. M. Deosthalee N. Sivaraman
Chairman & Managing President &
Director Whole-time Director
Place : Mumbai
Date : April 23, 2014
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting their Fifth Annual Report
together with the Accounts of your Company for the financial year ended
March 31, 2013.
Financial Results
The summarized financial results of the Company are given hereunder:
(Rs. Lakhs)
Particulars 2012-13 2011-12
Total Income 20,067.22 12,942.14
Less: Total Expenses 6,894.06 4,052.15
Profit before Exceptional Items 13,173.16 8,889.99
Exceptional Item* 23,572.92 -
Profit before Tax 36,746.08 8,889.99
Less: Provision for Tax 5,613.56 1,764.96
Profit after Tax 31,132.52 7,125.03
Add: Balance brought forward from
previous year 5,933.84 233.81
Balance available for appropriation
which Directors appropriate as follows: 37,066.36 7,358.84
Statutory Reserve 6,250.00 1,425.01
Proposed Dividend on Preference Shares 150.00 -
Proposed Dividend on Equity Shares 12,875.70 -
Dividend Distribution Tax on
Proposed Dividend 92.15 -
Surplus carried forward to Balance Sheet 17,698.51 5,933.83
*exceptional item represents profit on sale of investments net of costs
related to integration of acquired entities.
Appropriations
The Company proposes to transfer Rs. 6,250.00 lakhs (Previous year Rs.
1,425.01 lakhs) to Special Reserve created u/s 45ÂIC of Reserve Bank
of India Act, 1934 and retain Rs. 17,698.51 lakhs (Previous year Rs.
5,933.83 lakhs) in the Statement of Profit and Loss of the Company.
Further, the Company proposes to transfer Rs. 13,025.70 lakhs (Previous
year Rs. Nil) to Dividend Account towards payment of proposed dividend
on Equity Shares & Preference Shares and Rs. 92.15 lakhs (Previous year
Rs. Nil) towards payment of Dividend Distribution Tax on proposed
dividend.
Dividend
Your Directors recommend a final dividend of Rs. 8.75 on pro-rata basis
per Cumulative Compulsorily Redeemable Preference Share of face value
Rs. 100/- each for the financial year 2012-13, entailing an outflow of
Rs. 150.00 lakhs (excluding Dividend Distribution Tax).
Your Directors are also pleased to recommend a final dividend of Rs.
0.75 per Equity Share of face value Rs. 10/- each for the financial
year 2012-13, entailing an outflow of Rs. 12,875.70 lakhs (excluding
Dividend Distribution Tax).
The dividends, if approved at the ensuing Annual General Meeting, would
be paid to those members whose names appear in the Register of Members/
Beneficial Holders as on Monday, July 29, 2013.
Completion of acquisitions initiated in the previous financial year and
new initiatives
During the year, pursuant to regulatory approvals, your Company has
successfully completed on October 09, 2012, the acquisition of Indo
Pacific Housing Finance Limited, a housing finance company registered
with the National Housing Bank. The said subsidiary has been
subsequently re-named as L&T Housing Finance Limited. The said
subsidiary offers a wide range of housing finance products like home
loans, loans for construction/ repair of property and loan against
property.
During the year, your Company also acquired Family Credit Limited, a
well established Non Banking Financial Company (NBFC) with presence
across two wheeler and four wheeler financing, from Societe Generale
Consumer Finance. This acquisition would consolidate your Company''s
presence in auto financing business in India. The acquisition was
completed on December 31, 2012, pursuant to receipt of regulatory
approvals.
Pursuant to approvals received from Securities and Exchange Board of
India (SEBI), the acquisition of FIL Fund Management Private Limited
and FIL Trustee Company Private Limited, the companies carrying on the
mutual funds business of Fidelity in India, was successfully completed
on November 23, 2012, and subsequently transfer of schemes managed by
FIL Fund Management Limited was completed successfully. On further
approvals received from SEBI, the sponsorship of L&T Mutual Fund has
also been transferred to your Company from its subsidiary, L&T Finance
Limited, by acquisition of the entire shareholding of L&T Investment
Management Limited and L&T Mutual Fund Trustee Limited, the Asset
Management and Trustee Company respectively of L&T Mutual Fund from L&T
Finance Limited.
During the year, L&T Infrastructure Finance Company Limited, a
subsidiary of the Company, has incorporated L&T Infra Debt Fund Limited
in its capacity as sponsor, along with the Company and a few of its
other subsidiaries with a view to carry on the business of an
Infrastructure Debt Fund - Non Banking Financial Company post
application & receipt of the requisite regulatory approvals.
The Company has incorporated a wholly owned subsidiary, L&T Capital
Markets Limited, on February 07, 2013, for the purpose of carrying on
the business of Wealth Management.
During the year, most of the office premises owned by L&T Finance
Limited, a subsidiary of the Company, have been transferred to L&T
Unnati Finance Limited, another subsidiary of the Company to align the
balance sheet of L&T Finance Limited in line with its core business.
The above acquisitions and initiatives are intended to broad base the
Company''s offerings to its clientele through various subsidiaries and
de-risk the Company''s business from exposure to a single business, or
concentration in one or more sectors as well as enhance the
understanding of the performance and balance sheet of the various
subsidiaries.
Consolidated Financial Statements
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Clause 32 of the Listing Agreement entered into
with the Stock Exchanges and prepared in accordance with the Accounting
Standards prescribed by the Institute of Chartered Accountants of India
in this regard. The Auditors'' Report to the Shareholders thereupon does
not contain any qualification.
* Total Income grew by 33% from Rs. 300,730.14 lakhs in FY 2011-12 to
Rs. 400,645.79 lakhs in FY 2012-13.
* Profit Before Tax (PBT) grew by 44% from Rs. 68,424.64 lakhs in FY
2011-12 to Rs. 98,860.87 lakhs in FY 2012-13.
* Profit After Tax (PAT) grew by 61% from Rs. 45,479.51 lakhs in FY
2011-12 to Rs. 72,918.71 lakhs in FY 2012-13.
During the year, the net loan portfolio grew from Rs. 2,485,080.87
lakhs to Rs. 3,216,025.74 lakhs reflecting a healthy growth of 29%.
Assets under management of the Mutual Fund grew by 266% from Rs.
310,856.85 lakhs as at March 31, 2012 to Rs. 1,138,849.67 lakhs as at
March 31, 2013.
Raising of Capital
In order to fund the acquisitions and the capital requirements of the
subsidiaries from time to time, the Company has issued 4,490 Unsecured,
Redeemable, Non-Convertible Debentures aggregating to Rs. 44,900.00
lakhs and 7,50,00,000 Unlisted 8.75% Cumulative Compulsorily Redeemable
Preference Shares aggregating to Rs. 75,000.00 lakhs.
The issue of Cumulative Compulsorily Redeemable Preference Shares
aggregating to Rs. 100,000.00 lakhs was earlier approved by the
Shareholders through Postal Ballot, the results whereof were published
on March 12, 2013.
During the year, the Company has issued in total 1,998,920 Equity
Shares to the employees of the subsidiary companies pursuant to their
exercise of stock options under ESOP Scheme - 2010.
Pursuant to the above issue of Preference Shares and allotment of
Equity Shares pursuant to exercise of employee stock options, the
paid-up capital of your Company increased to Rs. 246,676.05 lakhs
(including Preference Share Capital of Rs. 75,000.00 lakhs) as at March
31, 2013 from Rs. 171,476.16 lakhs as at March 31, 2012.
Credit Rating
During the year, Credit Analysis and Research Limited (CARE) has
accorded a rating of ''CARE AA '' [Double A Plus] for the issue of
Non-Convertible Debentures (NCDs) for an aggregate amount of Rs.
75,000.00 lakhs. The aforesaid NCDs were also rated by ICRA Limited
(ICRA) as ''ICRA AA '' [ICRA Double A Plus]. The rating indicates that
the NCDs carry very low credit risk and are considered to have high
degree of safety regarding timely servicing of financial obligations
and further indicating "Stable" outlook.
Further, Credit Analysis and Research Limited (CARE) has accorded a
rating of ''CARE AA '' [Double A Plus] for the issue of Cumulative
Compulsorily Redeemable Preference Shares for an aggregate amount of
Rs. 75,000.00 lakhs during the year. The rating indicates that the
aforementioned instrument carry very low credit risk and are considered
to have high degree of safety regarding timely servicing of financial
obligations.
Divestment of Investments
During the year, in order to raise funds for its operations, the
Company has divested 7,995,619 Equity Shares held by it in Federal Bank
Limited, by means of a block deal on the BSE Limited. It has also
divested 24,712,337 Equity Shares held by it in City Union Bank Limited
to a subsidiary.
Fixed Deposits
The Company being a Non Deposit Accepting NBFC, has not accepted any
deposits from the public during the year under review and shall not
accept any deposits from the public without obtaining prior approval of
the Reserve Bank of India.
Directors
During the year, the Company has appointed Mr. R. Gopalakrishnan as an
Additional Director of the Company. Mr. Gopalakrishnan holds office up
to the date of the ensuing Annual General Meeting of the Company and
notice under Section 257 of the Companies Act, 1956 as been received
from a member proposing his appointment as Director of the Company.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. R. Shankar Raman retires by
rotation at the ensuing Annual General Meeting and is eligible for
re-appointment.
In accordance with the provisions of the Companies Act, 1956, and the
Articles of Association of the Company, Mr. Subramaniam N. and Mr. M.
Venugopalan, retire by rotation at the ensuing Annual General Meeting.
The Company has received intimation from them that due to prior
commitments, they do not offer themselves for re-appointment.
Considering that the business of the Company is being carried out
substantially through its subsidiaries and the Company being a holding
company, it is proposed that the vacancies arising from Mr. Subramaniam
and Mr. Venugopalan not seeking re- appointment be not filled up at the
current juncture.
Employee Stock Option Scheme
The disclosures required to be made under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999, as ammended from time to time,
together with a certificate obtained from the Statutory Auditors,
confirming compliance thereto, are provided in Annexure A forming part
of this Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement entered into with the
Stock Exchanges, a report on Corporate Governance and a certificate
obtained from the Statutory Auditors confirming compliance thereto, is
given as Annexure B to this Report.
Management Discussion and Analysis
Management Discussion and Analysis Report is given in an earlier part
of the Annual Report.
Auditors
The Auditors, M/s. Sharp & Tannan (S&T), hold office until the
conclusion of the ensuing Annual General Meeting and are recommended
for re-appointment. Certificate from the Auditors has been received to
the effect that their re-appointment, if made, would be within the
limits prescribed under Section 224(1B) of the Companies Act, 1956. S&T
has submitted the Peer Review Certificate dated September 21, 2010
issued to them by the Institute of Chartered Accountants of India
(ICAI).
Particulars of Employees
The Board of Directors wishes to express its appreciation to all the
employees for their outstanding contribution to the operations of the
Company during the year. The information required under Section 217(2A)
of the Companies Act, 1956, and the Rules made thereunder, is provided
in the Annexure forming part of the Report. In terms of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are
being sent to the Shareholders excluding the aforesaid Annexure. Any
shareholder interested in obtaining a copy of the same may write to the
Company Secretary. None of the employees listed in the said Annexure is
related to any Director of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
In view of the nature of activities being carried on by the Company,
Rules 2A and 2B of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, concerning conservation of
energy and technology absorption respectively, are not applicable to
the Company.
There were no foreign exchange earnings during the year (Previous year
Rs. Nil); the foreign exchange used by the Company during the year was
Rs. 168.11 lakhs (Previous year Rs. 527.69 lakhs) towards professional
fees, Directors'' sitting fees and travelling expenses.
Depository System
As the Members are aware, the Company''s equity shares are compulsorily
tradable in electronic form. As on March 31, 2013, 0.013% of the
Company''s total equity paid-up capital representing 220,613 shares is
in physical form and the remaining capital is in electronic form. In
view of the numerous advantages offered by the Depository system, the
Members holding shares in physical form are advised to avail of the
facility of dematerialization.
Subsidiary Companies
During the year, the Company has made strategic investments amounting
to Rs. 54,575 lakhs in its wholly owned subsidiaries, to provide
capital to these companies for their continued business growth.
The Ministry of Corporate Affairs, vide its Circular No. 2/2011 dated
February 08, 2011, has granted general exemption under Section 212(8)
of the Companies Act, 1956, for not attaching annual reports of
subsidiary companies subject to certain conditions being fulfilled by
the Company. As required under the said circular, the Board of
Directors has, at its meeting held on April 25, 2013, passed a
resolution giving consent for not attaching the Balance Sheet of the
subsidiary companies. The Company has also given the required
information on subsidiary companies in this Annual Report. The
Shareholders who wish to have a copy of the full report and accounts of
the subsidiaries will be provided the same on receipt of a written
request from them. These documents will be placed on the Company''s
website viz. www.ltfinanceholdings.com and will also be available for
inspection by any shareholder at the Registered Office of the Company,
on any working day during business hours.
The group structure is shown in the diagram below, indicating the
direct and indirect subsidiaries of the Company.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating Management,
and after due enquiry, confirm that:
1) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departures;
2) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2013 and of the profit of the Company
for the year ended on that date;
3) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
4) the annual accounts have been prepared on a going concern basis; and
5) proper systems are in place to ensure compliance of all laws
applicable to the Company.
Auditors'' Report
The Auditors'' Report is unqualified. The notes to the Accounts referred
to in the Auditors'' Report are self- explanatory and therefore do not
call for any further clarifications under Section 217(3) of the
Companies Act, 1956.
Reserve Bank of India Regulations
The Company has complied with all the applicable regulations of the
Reserve Bank of India as on March 31, 2013.
Acknowledgement
The Board of Directors would like to thank Reserve Bank of India and
other Regulatory / Government authorities and Stock Exchanges for their
support and stakeholders for their continued co-operation and support.
For and on behalf of the Board of Directors
Y. M. Deosthalee N. Sivaraman
Chairman & Managing President &
Director Whole-time Director
Place : Mumbai
Date : April 25, 2013
Mar 31, 2012
The Directors have pleasure in presenting their Annual Report together
with the Accounts of your Company for the year ended March 31, 2012.
Financial Results
The summarized financial results of the Company are given hereunder
(Rs. Lakhs)
Particulars 2011-12 2010-11
Gross Income 12,942.14 569.38
Profit before Tax 8,889 99 2152
Provision for Tax 1,764.96 8.00
Prof it after Tax 7,125 03 13 52
Add : Balance brought forward
from previous year 233.81 223.29
Balance available for
appropriation 7,358.84 236.81
Appropriations:
Statutory Reserve 1,425.01 3.00
Surplus carried forward to 5,933.83 233.81
Balance Sheet
Appropriations
The Company proposes to transfer Rs. 1,425.01 lakhs (Previous year Rs.
3 lakhs) to Special Reserve created u/s 45ÃIC of Reserve Bank of India
Act, 1934 and retain Rs. 5,933.83 lakhs (Previous year Rs. 233.81
lakhs) in the Profit and Loss Account of the Company
Dividend
Your Directors have considered it financially prudent in the long- term
interests of the Company to reinvest the profits into the business of
the Company to build a strong reserve base and grow the business of the
Company. No dividend has therefore been recommended for the year ended
March 31, 2012
Year In Retrospect
On July 7, 2011, the Company has, by way of a pre-lPO placement,
allotted 60,000,000 equity shares to two investors for an aggregate
consideration of Rs. 3,300,000,000 at a price of Rs. 55/- per equity
share. Further, pursuant to the prospectus dated August 3, 2011, the
Company has on August 6, 2011, issued and allotted 27,330,300 equity
shares to Anchor Investors at Rs. 56/- per equity share, 10,000,000
equity shares to eligible employees at Rs. 50/- per equity share and
200,375,061 equity shares to the Public at Rs. 52/- per equity share,
in all aggregating to 237,705,361 equity shares for an aggregate
consideration of Rs. 12,449,999,972.
In the backdrop of weak appetite of the investors in general to
corporate offerings in the primary market, the Initial Public Offering
(IPO) of your Company received an overwhelming response across all
categories. The Issue was widely subscribed across the band. The shares
of the Company were listed on National Stock Exchange of India Limited
and BSE Limited on August 12, 2011.
During the year, the Company has issued 31,825 equity shares to various
employees pursuant to their exercise of stock options under ESOP 2010
scheme.
The paid up capital of your Company increased to Rs. 17,147,616,120 as
at March 31, 2012 from Rs. 14,170,244,260 as at March 31, 2011, post
allotment of Pre IPO and IPO Shares and exercise of employee stock
options
New Initiatives and Diversification
During the year, your Company had identified a few new opportunities
with a view to diversify its business so as to make its offerings
holistic and insulate its investors from slowdowns due to sector
specific business exposures.
With the signing of definitive agreements for the acquisition of Indo
Pacific Housing Finance Limited (IPHF), a small sized housing finance
company during the later part of the year, your Company has announced
its entry into the housing finance business. Consummation of the
transaction is subject to regulatory approvals.
Further, L&T Finance Limited, a subsidiary of your Company has executed
definitive agreements to acquire, directly or through one of its
subsidiaries, FIL Fund Management Private Limited (Fidelity AMC) & FIL
Trustee Company Private Limited, the companies carrying on the mutual
fund business of Fidelity in India, subject to regulatory approvals.
Your Directors wish to inform you that the acquisition would help
deepening the presence of your Company across various sectors in
financial services through the operations of its subsidiaries, besides
reinforcing its brand connecting lakhs of retail investors.
Fixed Deposits
The Company has not accepted any public deposits
Directors
Mr. Y. M. Deosthalee who was earlier associated with the Company in the
capacity of Non-Executive Chairman has been appointed as the Chairman &
Managing Director of the Company from September 6, 2011, subject to the
approval of the shareholders of the Company
During the year, the Company has appointed Ms. Kamakshi Rao as an
Additional Director of the Company. Ms. Rao holds office up to the date
of ensuing Annual General Meeting of the Company and is eligible for
re-appointment.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. A. K. Jain, Mr. S. V.
Haribhakti and Mr. B. V. Bhargava retire by rotation at the ensuing
Annual General Meeting and are eligible for re- appointment.
Employee Stock Option Scheme
The disclosures required to be made under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999, together with a certificate obtained
from the Statutory Auditors, confirming compliance thereto, are
provided in Annexure A forming part of this Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement entered into with the
Stock Exchanges, a report on Corporate Governance and a certificate
obtained from the Statutory Auditors confirming compliance thereto, is
given as Annexure B to this Report.
Management Discussion & Analysis
Management Discussion & Analysis is given elsewhere in this Annual
Report.
Auditors
The Auditors, M/s. Sharp & Tannan (S&T), hold office until the
conclusion of the ensuing Annual General Meeting and are recommended
for re-appointment. Certificate from the Auditors has been received to
the effect that their re-appointment, if made, would be within the
limits prescribed under Section 224(1 B) of the Companies Act, 1956.
S&T has submitted the Peer Review Certificate dated September 21, 2010
issued to them by the Institute of Chartered Accountants of India
(ICAI).
Particulars of Employees
The Board of Directors wishes to express its appreciation to all the
employees for their outstanding contribution to the operations of the
Company during the year. The information required under Section 217(2A)
of the Companies Act, 1956, and the Rules made thereunder, is provided
in the Annexure forming part of the Report. In terms of Section 219(1
)(b)(iv) of the Act, the Report and Accounts are being sent to the
shareholders excluding the aforesaid Annexure. Any shareholder
interested in obtaining a copy of the same may write to the Company
Secretary. None of the employees listed in the said Annexure is related
to any Director of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
In view of the nature of activities being carried on by the Company,
Rules 2A and 2B of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, concerning conservation of
energy and technology absorption respectively, are not applicable to
the Company.
There were no foreign exchange earnings during the year (Previous year
Rs. Nil); the foreign exchange used by the Company during the year was
Rs. 527.69 lakhs (Previous year Rs. Nil) towards professional fees and
Directors' sitting fees.
Depository System
As the Members are aware, the Company's shares are compulsorily
tradable in electronic form. As on March 31, 2012, 0.0002% of the
Company's total paid up capital representing 3,315 shares is in
physical form and remaining capital is in Demat form. In view of the
numerous advantages offered by the Depository system, the Members
holding shares in physica mode are advised to avail of the facility of
dematerialization
Subsidiary Companies
The Company has the following direct and indirect subsidiary companies:
1. L&T Finance Limited ('L&T Finance')
2. L&T Infrastructure Finance Company Limited ('L&T Infra')
3. L&T FinCorp Limited ('L&T FinCorp')
4. L&T Investment Management Limited ('L&T IM')
5. L&T Mutual Fund Trustee Limited ('L&T MF Trustee')
6. L&T Infra Investment Partners Advisory Private Limited ('L&T Infra
Invt. Partners Advisory')
7. L&T Infra Investment Partners Trustee Private Limited ('L&T Infra
Invt. Partners Trustee')
8. L&T Access Financial Advisory Services Private Limited ('L&T
Access')
9. L&T Unnati Finance Limited ('L&T Unnati')
During the year, the Company has made strategic investments of Rs.
72,500 lakhs in its wholly owned subsidiaries, L&T Finance Limited, L&T
Infrastructure Finance Company Limited and L&T FinCorp Limited
(formerly India Infrastructure Developers Limited), to provide capital
to these companies to enable them to raise resources for their
continued business growth
The Ministry of Corporate Affairs, vide its Circular No. 2/2011 dated
February 8, 2011, has granted general exemption under Section 212(8) of
the Companies Act, 1956, for not attaching annual reports of subsidiary
companies subject to certain conditions being fulfilled by the Company.
As required under the circular, the Board of Directors has, at its
meeting held on Apri 26, 2012, passed a resolution giving consent for
not attaching the Balance Sheet of the subsidiary companies. The
Company has also given the required information on subsidiary companies
in this Annual Report. The Shareholders who wish to have a copy of the
full report and accounts of the subsidiaries will be provided the same
on receipt of a written request from them These documents will be
placed on the Company's website viz. www.ltfinanceholdings.com and will
also be available for inspection by any shareholder at the Registered
Office of the Company, on any working day during business hours
Consolidated Financial Statements
Your Directors have pleasure in attaching the Consolidated Financial
Statements pursuant to Clause 32 of the Listing Agreement entered into
with the Stock Exchanges and prepared in accordance with the Accounting
Standards prescribed by the Institute of Chartered Accountants of India
in this regard The Auditors' Report to the Shareholders does not
contain any qualification
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations received from the Operating Management,
and after due enquiry, confirm that:
1) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
2) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2012 and of the profit of the Company
for the year ended on that date;
3) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
4) the annual accounts have been prepared on a going concern basis; and
5) proper systems are in place to ensure compliance of all laws
applicable to the Company
Auditors' Report
The Auditors' Report is unqualified. The notes to the Accounts referred
to in the Auditors' Report are self-explanatory and therefore do not
call for any further clarifications under Section 217(3) of the
Companies Act, 1956.
Reserve Bank of India Regulations
The Company has complied with all the applicable regulations of the
Reserve Bank of India as on March 31, 2012
Acknowledgement
The Board of Directors would like to thank Reserve Bank of India and
other Regulatory/ Government authorities and Stock Exchanges for their
support and stakeholders for their continued co-operation and support.
For and on behalf of the Board of Directors
Y. M. Deosthalee N. Sivaraman
Chairman & Managing President &
Director Whole-time Director
Date : April 26, 2012
Place : Mumbai