A Non Banking Financial Company (NBFC) is a company

registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds ,hire-purchase, insurance business.

It does not include any institution whose principal business is agriculture or industrial activity or the sale, purchase or construction of immovable property.

The working and operations of NBFCs are regulated by the Reserve Bank of India(RBI) within the framework of the Reserve Bank of India Act, 1934 (Chapter III B) and the directions issued by it.

NBFC

Asset Finance Company (AFC)Principal business for this purpose is defined as aggregate of financing physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income respectively. For example,automobiles, tractors and material handling equipments Investment Company (IC)IC means any company which is a financial institution carrying on as its principal business the acquisition of securities.

TYPES OF NBFCs IN INDIA

Loan Company (LC)LC means any company which is a financial institution carrying on as its principal business the providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not include an Asset Finance Company.

Infrastructure Finance Company (IFC)IFC is a non-banking finance company which deploys at least 75 per cent of its total assets in infrastructure loans, has a minimum Net Owned Funds of Rs. 300 crore, has a minimum credit rating of ‘A ‘or equivalent and a CRAR of 15%.

Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC)

IDF-NBFC is a company registered as NBFC to facilitate the flow of long term debt into infrastructure projects. It raises resources through issue of Rupee or Dollar denominated bonds of minimum 5 year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.

Non-Banking Financial Company – Factors (NBFC-Factors)

NBFC-Factor is a non-deposit taking NBFC engaged in the principal business of factoring. The financial assets in the factoring business should constitute at least 50 percent of its total assets and its income derived from factoring business should not be less than 50 percent of its gross income.

Gold Loan NBFCs in IndiaThough there are many NBFCs offering gold loans in India, about 95 per cent of the gold loan business is handled by three Kerala based companies, viz., Muthoot Finance, Manapuram Finance and Muthoot Fincorp.

Residuary Non-Banking Companies (RNBCs)Residuary Non-Banking Company is a class of NBFC which is a company and has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner and not being Investment, Asset Financing, Loan Company. These companies are required to maintain investments as per directions of RBI, in addition to liquid assets

Difference between NBFCS & Banks

NBFCs perform functions similar to that of banks but there are a few differences-

An NBFC can not accept demand deposits An NBFC is not a part of the payment and

settlement system An NBFC cannot issue cheques drawn on itself Deposit insurance facility of the Deposit

Insurance and Credit Guarantee Corporation is not available for NBFC depositors, unlike banks.

L&T Finance Holdings Ltd., incorporated in the

year 2008, is a Large Cap company (having a market cap of Rs 12536.8 Cr.) operating in Finance sector.

L&T Finance Holdings Ltd. key Products/Revenue Segments include Dividend which contributed Rs 247.23 Cr to Sales Value (85.06% of Total Sales), Interest which contributed Rs 43.39 Cr to Sales Value (14.93% of Total Sales), for the year ending 31-Mar-2015.

L & T FINANCE

For the quarter ended 31-Dec-2015, the company has reported a Consolidate sales of Rs. 1819.81 Cr., up 1.47% from last quarter Sales of Rs. 1793.38 Cr. and up 15.76% from last year same quarter Sales of Rs. 1571.99 Cr. Company has reported net profit after tax of Rs. 211.24 Cr. in latest quarter.

The company’s management includes Mr.Y M Deosthalee, Ms.Kamakshi Rao, Mr.N Suryanarayanan, Mr.Sachinn Joshi, Ms.Upma Goel, Mr.Amit Chandra, Mr.B V Bhargava, Mr.Dinanath Dubhashi, Mr.Harsh Mariwala, Mr.N Suryanarayanan, Mr.P V Bhide, Mr.R Shankar Raman, Mr.S V Haribhakti, Mr.T Thomas Mathew.

L & T VISION

The BOD’s has complete access to the company information through

Annual revenue budgets, financing and capital expenditure plans

Quarterly results and results of operations of independent company and business segments

Minutes of meetings of BODs, Audit committee, Nomination and Remuneration committee and shareholder’s grievance committee

Quarterly report on fatal accidents Developments in respect of human resources

L&T follows several frameworks to report on their economic, environmental and social performances.

Global Reporting Initiative (GRI) framework The national Voluntary Guidelines (NVG) United National Global Compact (UNGC) International Labour Organization (ILO)

Commitment to external initiatives

The contribution to their green portfolio to overall

sales increased from 13.6% last year to 14.31% this year

The new gateway of India – Terminal 2 at Mumbai airport has received the gold certificate from Leadership in energy and Environmental Design(LEED)

The 83.8 m Air Traffic Control (ATC) tower – tallest in India , was commissioned at the Chhatrapathi Shivaji international airport, Mumbai

PRODUCT PERFORMANCE

L&T ensures ethics and transparency in their

engagements with stakeholders and advocate responsible business practices

They incorporate social and environmental considerations in their business operations

Foster a culture of trust and enhance the well being of employees and communities

Promote social equity and they are a partner with health care , education and skill building

Adopt sustainable and resource efficient processes and provide value added products and services

CSR POLICY

GOING GREEN

Acquiring, developing and retaining a pool of

high caliber talent Enabling and empowering their employees to

be creative and innovative Establishing systems and practices for

maintaining transparency, fairness and equity Creating a culture of continuous learning,

competitiveness and excellence through change management, respecting ethics, values and good governance

CORPORATE HR POLICY

The Indian economy grew by 4.7% in 2013-14 The second successive year of 5% growth The domestic economic slowdown worsened

with limited investments made in the private sector and many government projects in uncertainty

This impacted the pace of capital expenditure in infrastructure, power and industrial sectors

Against this challenging economic environment, they have performed commendably on most key performance parameters

Growth for all stakeholders

Stake holder’s engagement

Order inflows of the company have shown a robust of 15% growth over the previous year

The company completed the transfer of its hydrocarbon business undertaking along with related assets, liabilities and specific identified reserves to the wholly owned subsidiary – L&T hydrocarbon engineering