Kurla Complex, Bandra (East), P
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July 2, 2020 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Corporate Relations Department, Plot No. C/1, G Block, 1st Floor, New Trading Ring, Bandra - Kurla Complex, Bandra (East), P. J. Towers, Dalal Street, Mumbai - 400 051. Mumbai - 400 001. Symbol: L&TFH Security Code No.: 533519 Kind Attn: Head - Listing Department / Dept of Corporate Communications Sub: Submission of the Annual Report for the financial year 2019-20 and Notice of the Annual General Meeting Dear Sir / Madam, Pursuant to the requirements of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the Annual Report of the Company for the financial year 2019-20 (“Annual Report”) along with the Notice of the Twelfth Annual General Meeting (“Notice”) of the Company to be held on Tuesday, July 28, 2020 at 3:00 p.m. through electronic mode (video conference or other audio visual means). In accordance with Ministry of Corporate Affairs circular dated May 5, 2020 and SEBI circular dated May 12, 2020, the Annual Report along with the Notice is sent through electronic mode to the Members of the Company. Further, the aforesaid Annual Report along with Notice has also been uploaded on the website of the Company at www.ltfs.com/investors.html. We request you to take the aforesaid on records. For L&T Finance Holdings Limited Apurva Rathod Company Secretary and Compliance Officer Encl: as above CREATING VALUE FOR PERPETUITY L&T FINANCE HO L DINGS LIMI T ED | ANN U A L R E P O RT 2019-20 RT Registered Office: L&T Finance Holdings Limited Brindavan, Plot No. 177, C.S.T. Road Kalina, Santacruz (East) Mumbai - 400 098, Maharashtra, India Phone: +91 22 6212 5000 Fax: +91 22 6212 5553 www.ltfs.com [email protected] CIN:L67120MH2008PLC181833 © L&T Finance Holdings Limited 2020 ANNUAL REPORT 2019-20 CORPORATE INFORMATION Board of Directors Joint Statutory Auditors S. V. Haribhakti M/s. Deloitte Haskins & Sells, LLP Non-Executive Chairman M/s. B. K. Khare & Co. Dinanath Dubhashi Registered Office & Investor Service Centre Managing Director & Chief Executive Officer Brindavan, Plot No.177, C.S.T. Road, R. Shankar Raman Kalina, Santacruz (East), Non-Executive Director Mumbai - 400 098, P. V. Bhide Maharashtra, India. Independent Director Phone: +91 22 6212 5000 Fax: +91 22 6212 5553 Thomas Mathew T. Website: www.ltfs.com Independent Director Email: [email protected] Nishi Vasudeva Independent Director Registrar and Share Transfer Agents Rajani R. Gupte Link Intime India Private Limited Independent Director C-101, 247 Park, L.B.S. Marg, Vikhroli (West), Pavninder Singh Mumbai - 400 083, Nominee Director Maharashtra, India. Prabhakar B. Phone: +91 22 4918 6000 Non-Executive Director Fax: +91 22 4918 6060 Website: www.linkintime.co.in Company Secretary Email: [email protected] Apurva Rathod CORPORATE OVERVIEW 2-15 SNAPSHOT OF OUR BUSINESSES 2 CHAIRMAN’S MESSAGE 4 KEY PERFORMANCE INDICATORS 6 A mountain is resilient to the toughest of tempests and has the ability BOARD OF DIRECTORS 9 to withstand disruptions. It stands tall, evoking a sense of unshakeable GROUP EXECUTIVE COMMITTEE 12 strength and perpetuity. VALUE CREATION MODEL 14 These distinctive qualities of a mountain resonate with LTFH. Robust REPORTS 16-80 fundamentals, strong legacy, resilient business model, and most importantly, the vision to create value for perpetuity, is what makes MANAGEMENT DISCUSSION & ANALYSIS 16 BOARD’S REPORT 34 your company standout. CORPORATE GOVERNANCE 61 FINANCIAL STATEMENTS 81-221 STANDALONE 81 CONSOLIDATED 142 NOTICE FOR THE AGM 222-231 Corporate Overview Reports Financial Statements L&T Finance Holdings Limited is one of India’s SNAPSHOT OF most valued and fastest-growing Non-Banking Financial Companies (NBFCs). Incorporated OUR BUSINESSES in 2008 and headquartered in Mumbai, the Company offers a diverse range of financial products and services in Rural, Housing and 221 130+ Lakh Vision Infrastructure finance sectors. It also offers Branches Investment management services. Customer base To be an admired and inspirational financial institution, creating sustainable value for all our stakeholders. 1,532 23,000+ Micro loans Employees across Values meeting centres subsidiaries and businesses All figures as on March 31, 2020 Ambition Pride Discipline Integrity OUR OFFERINGS Lending Businesses Non lending AWARDS AND AccREDITATIONS Rural Finance Businesses Farm Equipment Two-Wheeler Finance Finance FICCI Award Business Standard Golden Peacock 10th India Digital 2019 for Investment Social Excellence Award 2019 for Awards - Category: Corporate Social Management Award 2019 for Corporate Social Best use of Responsibility in Most Socially Aware Responsibility technology to drive Consumer promoting women Micro Loans Corporate of the Year / execute CSR Loans empowerment Housing Finance Loan Against Real Estate Home Loans The Asset Triple A Infrastructure Property Finance Awards 2019 Transport Deal of the Year - Highly Commended - Underwriter and Advisor Infrastructure Finance Infra Finance Infra Debt Fund 2 CREATING VALUE FOR PERPETUITY Annual Report 2019-20 3 Corporate Overview Reports Financial Statements Challenging times organisation. As a result of these sustained efforts, your Company’s Tough times invariably test a Company’s fortitude and sustainability. AAA credit ratings were reaffirmed by India Ratings and CRISIL in It sure tested your Company’s mettle as well throughout FY20. It April and May 2020, respectively. Chairman’s presented us with a challenging macro-economic environment, Life post COVID-19 which worsened in the last two weeks of the financial year on FY21 will experience the impact of COVID-19 in the areas of account of COVID-19. The overall business environment remained demand pickup, credit culture, repayment capacity and willingness MESSAGE subdued with demand slackening across high-growth sectors. to pay. While we anticipate strong recoveries in rural India, there There was a visible slowdown in manufacturing activities, while may be a slow pick-up in the real estate and infrastructure financing the services segment grew moderately. The GDP growth for FY20 segments. Your Company is further leveraging its technology plummeted to a 4.2%, as against the 6.1% in FY19. The only infrastructure to strengthen its data analytics and increase exception was the rural economy, which emerged as a winner, collections. Apart from doing stringent project monitoring, your backed by favourable policy measures, healthy water-reservoir levels, Company has also introduced tighter credit norms for fresh business and increased sowing of Rabi crops. disbursements and undertaken several cost-rationalisation measures Most NBFCs continued to face their own set of challenges: liquidity for the overall enhancement of its business efficiencies. Dear Shareholders, and solvency issues, rising borrowing costs and limited funding Team access. Therefore, lenders across all genres strongly preferred high- Even as I write this, the global economy is being challenged like never Your team is undergoing a swift and quick change in the wake of rated NBFCs, such as your Company, with sound fundamentals, before, as economic activities and growth are being obstructed by the the coronavirus outbreak. This process of transformation would strong parentage and high credit ratings. Despite the difficult ruthless pandemic. Life and lifestyles across the world are undergoing not have been possible without its 23,000+ employees across the conditions in the economy, your Company remained strong because a radical change — one that no one intimated us about or prepared board. The team has consistently risen to the challenge and ensured of its robust business model. us for. As we fight each day adjusting to the new normal, most of us continued operating success. Even during the lockdown, and while I am proud to state that your Company, by the virtue of its proactive cannot help but think of our lives after this crisis blows over. These are working remotely, the team displayed the same level of spirit and and prudent strategies, remained alert while displaying its resilience difficult times and we must prepare to embrace the radical changes energy as before. For this, I would like to sincerely thank the team to ensure business continuity. I am equally happy to state that your in our lives and the way we work. A key lesson from this crisis has for their enormous contributions. I hope we continue working Company retained its leadership position amongst the principal been the need to re-strategise and adapt — at the organisation as together and moving forward with the same collective commitment, financiers across its focused businesses in FY20. well as individual levels. It calls for designing a new plan of action passion and consistent engagement. and adjusting to the new realities — rapidly and responsibly. As you Apart from retaining our market share across businesses, your Sustainability and community well-being know, NBFCs play a critical role in the nation’s economic development Company also gained some in Two-Wheeler and Farm Equipment Remaining true to our tenet of financing a sustainable future, your by providing a fillip to transportation, employment generation, segments. It posted satisfactory results barring the last few days of Company’s investments into Renewable Energy are made keeping infrastructure development, wealth creation, credit delivery even March 2020, which witnessed a slowdown in disbursements and in mind the imperatives of climate change and the increasing Indian in the remotest corners of the country, and seamless funding for collections owing to the nationwide lockdown. small businesses, start-ups and MSMEs. They encourage micro- energy demand. Through the vast footprint of our rural lending Creating value for perpetuity entrepreneurship and imbue self-reliance by attending to various business, your Company is enabling entrepreneurship and self How we respond to a situation is an indicator of how well- financial needs of the unbanked. That is why the contribution of the reliance for the hard working men and women of our country.