Geojit Financial Services Ltd.
|BSE: 532285||Sector: Financials|
|NSE: GEOJITFSL||ISIN Code: INE007B01023|
|BSE 15:40 | 20 Mar||98.80||
|NSE 15:51 | 20 Mar||99.45||
|Mkt Cap.(Rs cr)||2,349|
|Mkt Cap.(Rs cr)||2349.46|
Geojit Financial Services Ltd. (GEOJITFSL) - Director Report
Company director report
Your Directors have pleasure in presenting their 23rd Annual Report of the Company forthe financial year ended 31st March 2017.
FINANCIAL HIGHLIGHTS (C in Crores)
Review of performance
on a standalone basis your Company has recorded a total income of '266.75 crores forthe financial year ended 31st March 2017 an increase of 13% compared to last year'sfigure of '236.37 crores. The profit before tax is '74.04 crores and the net profit aftertax is '38.31 crores. Basic earnings per share work out to '1.63 compared to '1.53 in theprevious year.
On a consolidated basis your company earned a total income of '305.76 crores for thefinancial year an increase of 12% over the previous year's figure of '271.96 crores andprofit before tax of '91.45 crores and a net profit of '56.02 crores.
A detailed analysis of the performance is given in the Management Discussion andAnalysis Report appended hereto.
The Board in its meeting held on 26th May 2017 has recommended a final dividend of'1.25 per equity share of Re. 1/- each (125%) for the financial year 2016-17. The proposalis subject to the approval of the shareholders of the Company at its ensuing AnnualGeneral Meeting to be held on 25th July 2017.
Increase in share capital
During the year under review the paid up share capital of the Company increased from'234898476/- divided into 234898476 equity shares of '1/- each to '235544665/-
divided into 235544665 equity shares of Re. 1/- each consequent to the issue of646189 equity shares to employees upon exercise of stock options under Employee Stockoption plan- 2010 of the Company.
Consolidated financial statement
The Consolidated Financial Statements of the Company are prepared in accordance withSection 129 of the Companies Act2013 read with relevant Accounting Standards issued bythe Institute of Chartered Accountants of India and forms part of this Annual Report.
Subsidiaries joint ventures and associate companies
As on 31st March 2017 following are the subsidiaries/associate/joint ventures of theCompany:
i. Geojit Credits private Limited
ii. Geojit Investment Services Limited
iii. Geojit Financial Management Services private Limited
iv. Qurum Business Group Geojit Securities LLC
v. Geojit technologies private Limited
vi. Geojit Financial Distribution private Limited Joint Ventures :
i. Barjeel Geojit Securities LLC
ii. Aloula Geojit Capital Company
i. BBK Geojit Securities Co. KSCC
the Board of Directors of the two wholly owned subsidiary companies viz. GeojitFinancial Management Services private Limited and Geojit Financial Distribution privateLimited proposed a scheme of merger with Geojit Investment Services Limited (anotherwholly owned subsidiary) pursuant to the provisions of Sections 391 to 394 and otherapplicable provisions of the Companies Act 1956 (pending notification of thecorresponding provisions of the Companies Act 2013).
Meetings of the shareholders for approval of the scheme of merger were held in March2016 after giving due notice and publication in accordance with the directions of the HighCourt. the shareholders of the aforementioned companies approved the Scheme ofArrangement. A petition has been filed seeking sanction of the Scheme of Amalgamationbetween the said companies. on notification of relevant sections under Companies Act2013 the above mentioned petition has now been transferred to National Company Lawtribunal (NCLT)
change of name of the company
In accordance with the provisions of restated shareholders agreement entered betweenCompany BNp paribas S A its affiliate and the initial promoters of the Company theCompany has changed its name from Geojit BNp paribas Financial Services Limited to GeojitFinancial Services Ltd vide approval received from the Ministry of Corporate AffairsGovernment of India dated 9th February 2017.
Directors and key managerial personnel
Jean Christophe Gougeon Franciska Decuypere and Jean philippe Huguet who wererepresenting BNp paribas ceased to be Directors of the Company from 4th August 2016 25thNovember 2016 and 23rd November 2016 respectively. the withdrawal of BNp paribas nomineefrom the Board of the Company is in accordance with the provisions of restatedshareholders agreement entered between Company BNp paribas S A its affiliate and theinitial promoters of the Company.
ii. retirement by rotation
In accordance with Article 80 of the Articles of Association of the Company Mr.punnoose George Non-Executive Director (DIN 00049968) will retire by rotation at theensuing Annual General Meeting of the company and being eligible offers himself forreappointment. the Board recommends his re-appointment.
Adoption of new articles of association of the company
the Company has adopted a new Articles of Association in view of the
changes as per Companies Act 2013 and the re-stated Shareholders' Agreement betweenthe Company BNp paribas S A its affiliate and the initial promoters of the Company.
Annual evaluation of the board its committee and individual directors
pursuant to the provisions of Companies Act2013 and the Listing Regulations the Boardof Directors has carried out an annual evaluation of its own performance its Committeeand individual Directors. Assessment sheets for evaluation of performance of Board itscommittees and individual directors were prepared based on various aspects which amongother parameters included composition of the Board and its Committees conducting ofBoard Meetings effectiveness of its governance practices etc.
Further the Independent Directors at their meetings held during the year reviewed theperformance of the Board the non Independent Directors and the Chairman.
Familiarization programme for independent directors
The Independent Directors of the Company are persons of integrity possessing richexperience and expertise in the field of corporate management finance capital marketeconomic and business information. the company has issued appointment letter to theIndependent Directors setting out in detail the terms of appointment duties roles &responsibilities and expectations of the Independent Director. the Board of Directors hascomplete access to the information within the Company. presentations are regularly made tothe Board of Directors / Audit Committee / nomination & Remuneration Committee /Corporate Social Responsibilities Committee / Stakeholders Relationship Committee onvarious related matters where Directors have interactive sessions with the Management.
the details on the Company's familiarisation programme for Independent Directors can beaccessed at http://www.geojit.com/pdfs/familiarizationprogrammeforindependentdirectors.pdf
the company follows a policy on remuneration of Directors Key Managerial personnel(KMp) Senior Management personnel (SMp) and other employees of the Company. the policywas approved by the nomination & Remuneration Committee of the Company.
the nonexecutive Directors of the Company shall be entitled to receive remuneration byway of sitting fees for attending meeting of the Board and Committees thereof.
the remuneration to KMp's and SMp's and employees shall include direct remuneration andindirect remuneration primarily and strategic remuneration which can be performance Linkedand/or profit linked incentive.
Remuneration policy of the Company is given as Annexure VIII to the Directors Report.
risk management policy
Risks are an integral part of business and it is imperative to manage these risks atacceptable levels in order to achieve business objectives. the risks to which the Companyis exposed are both external and internal. Your company has formulated a Risk Managementpolicy to provide an integrated and standardized approach in managing all aspects of riskto which your Company is exposed. An Internal Risk Management Committee monitors theenterprise risk management policy with participation from officers responsible for riskmanagement and to take appropriate steps to ensure that these risks are at acceptablelevels.
Whistle blower policy & vigil mechanism
Your Company has laid down a Vigil Mechanism and formulated a Whistle Blower policy inorder to provide a framework for responsible and secure whistle blowing mechanism. thepolicy aims to provide an avenue for employees and Directors to raise their concerns aboutunethical behavior actual or suspected fraud or violation of the company's code ofconduct and it also empowers the Audit Committee of the Board of Directors to investigatethe concerns raised by the employees.
All Directors and employees of the Company are eligible to make protected disclosuresunder the policy addressed to the Vigilance officer of the Company in relation to mattersconcerning the Company. We further affirm that no employee of the Company was deniedaccess to the Audit Committee.
the details on the Company's Whistle Blower policy and Vigil Mechanism can be accessedat http://www.geojit.com/pdfs/vigil_mechanism%20_%20Final%20Draft_Revised.pdf
particulars of loans guarantees or investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes to the financial statements provided in this Annual Report.
internal control system
The Company has put in place an adequate system of internal control commensurate withits size and nature of business. These systems provide a reasonable assurance in respectof providing financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies.
the scope and authority of the Internal Audit activity are well defined in the InternalAudit Charter approved by the Audit Committee. the Company has a dedicated Internal Auditteam with skills commensurate with the size nature & complexity of operations of theCompany. Internal Audit reports functionally to the Audit Committee of Board which reviewsand approves risk based annual internal audit plan. Audit Committee periodically reviewsthe performance of internal audit function. During the year the Audit Committee metregularly to review reports submitted by the Internal Audit department. All significantaudit observations and follow-up actions there on were reported to the Audit Committee.
the Company's Board & Audit Committee reviews adherence to internal controlsystems internal audit reports and legal compliances. the Audit Committee reviews allquarterly and yearly financial results of the Company and recommends the same to Board forits approval.
Transfer of unpaid and unclaimed amounts to IEPF
pursuant to the provisions of Section 124 of the Companies Act 2013 money transferredto the unpaid Dividend Account of the Company and which has remained unpaid or unclaimedfor a period of seven years from the date of transfer has been transferred by the Companyto the Investor Education and protection Fund ("IERF") established by theCentral Government pursuant to Section 125 of the said Act.
Management's discussion & analysis
the Management's Discussion and Analysis is given separately and forms part of thisAnnual Report.
Insider trading regulations
Based on the requirements under SEBI (Prohibition of Insider trading) Regulations2015 as amended from time to time the Company has adopted a Code of Conduct forPrevention of Insider trading and Code of Corporate Disclosures which is applicable to allDirectors and the Designated Employees of the Company. the Code lays down the guidelineswhich advises on the procedures to be followed and disclosures to be made while dealing inshares of the Company and indicate the consequences of non-compliance. A copy of the Codehas been put on the Company's website.
code of conduct for directors & senior officers
the Board has adopted a Code of Conduct for Directors & Senior Management inaccordance with the provisions of the Companies Act 2013 and Regulation 17(5) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. the Code alsoincorporates the duties of Independent Directors. All the Board Members and SeniorManagement Personnel have confirmed compliance with the Code. A declaration to that effectsigned by the Managing Director forms part of the Corporate Governance Report. A copy ofthe Code has been put on the Company's website.
As a service Company the Company's operations are heavily dependent on qualified andcompetent personnel. As on 31st March 2017 the Company had 2195 employees. Your Companytakes significant effort in training all employees at various levels.
employee stock option scheme (Esos)
the Company presently have two Employee Stock Option Schemes viz ESOS 2010 and ESOS2016. the Nomination & Remuneration Committee at its meeting held on August 04 2016granted 8079340 options under ESOS 2016. the Board of Directors of the Company hasallotted total 5127124 equity shares of Re. 1/- each under ESOS 2010 Scheme to itsemployees who exercised the stock options on various dates at various exercise prices inaccordance with the terms and conditions of ESOS.
the aforesaid ESOR schemes are in compliance with SEBI (Share Based Employees BenefitsScheme) Regulations 2014 and the details are attached as Annexure I to this report andalso available on our website and can be accessed at
corporate social responsibility (csR)
the Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating activities to beundertaken by the Company which has been approved by the Board. the Company established acharitable trust namely Geojit Foundation and carries the CSR activities of the companythrough the foundation.
the Company has identified Education and Health as key focus areas of engagement forCSR activities. the Company would also undertake other initiatives in compliance withSection 135 read with Schedule VII of the Companies Act 2013. the Annual Report on CSRactivities is annexed herewith and marked as Annexure IV to this report.
Particulars of employees
Particulars of employees covered by the provisions of Section 197 of the Companies Act2013 read with Companies (Appointment and Remuneration of Managerial personnel) Rules2014 is given as Annexure III to this Report.
Directors' responsibility statement
pursuant to requirement of Section 134(3)(c) and Section 134(5) of the Companies Act2013 and based on the representations received from the Management your Directors statethat :
i. in the preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed and there are no materialdepartures from the same;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and of the profitof the company for the year ended on that date;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
iv. the Directors have prepared the annual accounts on a going concern basis;
v. the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Conservation of energy technology absorption foreign exchange earnings and outgo
The Company has nothing to report in respect of information on conservation of energyand technology absorption as required under Section 134 of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 since the Company is not engaged in manufacturing orprocessing business. The details regarding foreign exchange earnings and outgo are givenas Annexure II to this Report.
Your Company has complied with the Corporate Governance requirements under CompaniesAct2013 and as stipulated under the provisions of the SEBI (Listing obligations andDisclosure Requirements) Regulations 2015. A detailed Report on Corporate Governance isgiven as Annexure V to this Report. A certificate of Statutory Auditor confirmingcompliance of the Corporate Governance requirements by the Company is attached to theReport on Corporate Governance.
secretarial audit report
In accordance with the provisions of Section 204 of the Companies Act 2013 the Boardhas appointed M/s. Satheesh & Remesh - Company Secretaries in Whole Time practiceKochi as the Secretarial Auditor for the financial year 2016-17. the report of theSecretarial Auditor is annexed to this report as Annexure VI.
At the Annual General Meeting held on 4th August 2016 M/s. B S R & Associates LLpChartered Accountants were appointed as statutory auditors of the Company to hold officetill the conclusion of the twenty Seventh Annual General Meeting to be held in thefinancial year 2021. In terms of Section 139 of the Companies Act 2013 the appointmentof auditors shall be placed for ratification at every Annual General Meeting. Accordinglythe appointment of M/s. B S R & Associates LLR Chartered Accountants as statutoryauditors of the Company is placed for ratification by the shareholders.
the Auditors' Report to the Shareholders for the year under review does not contain anyqualification.
Extract of annual return
the extract of the Annual return in Form MGT - 9 is given as Annexure VII to thisReport.
Number of board meetings
the Board of Directors met 8 (eight) times in the financial year 2016-17. the detailsof the board meetings and the attendance of the Directors are provided in the CorporateGovernance Report.
composition of audit committee
the Board has re-constituted the Audit Committee on 8th December 2016 with three Non-executive Independent Directors comprising of Mr. R Bupathy as the Chairman Mr. A.RKurian and Mr. Mahesh Vyas as other Committee Members.
Related party transactions
All contracts/arrangements/transactions entered by the Company
during the financial year with the related parties were in the ordinary course ofbusiness and on an arm's length basis. During the year the company had not entered intoany contract/ arrangement / transaction with any related party which could be consideredmaterial in accordance with the policy of the company on materiality of related partytransactions. Thus disclosure in Form AoC-2 is not required.
The policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website.
Your Directors draw attention of the members to Note 39 to the financial statementwhich sets out related party disclosures.
Policy relating to directors appointment
the Company with the approval of nomination & Remuneration Committee has adopted apolicy on Board diversity and the recommendation of candidature for Board appointment willbe based on merit that complements and expands the skills experience and expertise of theBoard as a whole taking into account gender age professional experience andqualifications cultural and educational background and any other factors that the Boardmight consider relevant and applicable from time to time towards achieving a diverseBoard.
Declaration by independent directors
the Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he meets the criteria of Independence laiddown in Section 149(6) of the Companies Act 2013.
Disclosure as per sexual harassment of women at workplace! prevention prohibition andredressal ) Act 2013.
the Company has zero tolerance for sexual harassment at work place and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provision of Sexual Harassment of Women at Workplace (prevention prohibition andRedressal) Act 2013 and the rules framed thereunder. As required under the Law aninternal complaints committee has been constituted for reporting and conducting inquiryinto the complaints made by the victim on the harassments at the work place.
Your Directors further state that during the year under review one complaint wasreceived pursuant to the Sexual Harassment of Women at Workplace (prevention prohibitionand Redressal) Act 2013 and the
same was investigated in accordance with the procedures prescribed and adequate stepswere taken to resolve them.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review.
a. Details relating to deposits covered under Chapter V of the Companies Act 2013.
b. Issue of equity shares with differential right as to dividend voting or otherwise
c. Issue of shares (including sweat equity shares) to employees of the company underany scheme save and except ESoS referred to in this report.
d. No significant or material orders were passed by the regulators or Courts ortribunals which impact the going concern status and Company's operation in future.
Your Directors wish to acknowledge the valuable guidance and assistance received fromSecurities and Exchange Board of India Stock Exchanges & other RegulatoryAuthorities BNp paribas KSIDC our clients and business partners. We look forward toreceiving their continued support and encouragement. the Board of Directors wishes toextend their thanks and appreciation and express their gratitude for the continuingcommitment and dedication of employees at all levels. the Directors are thankful to theesteemed shareholders for their support and the confidence reposed in the Company.
For and on behalf of the Board of Directors
place : Kochi A P Kurian
Date :26.05.2017 Chairman
An nexu re-l_ to
[Details of the Employee Stock Option Scheme (ESOS) as of March 31 2017 pursuant tothe requirements under Regulation 14 of the Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014]
The Company has two ESOS viz. ESOS 2016 and ESOS 2010.
During the year under review the Company has not amended the terms of stockoptions granted under ESOS 2016 and ESOS 2010.
The following details have been disclosed on the Company's website at
A. Relevant disclosures in terms of the'Guidance note on accounting for employeeshare-based payments'issued by ICAI or any other relevant accounting standards asprescribed from time to time.
The disclosures are provided in the Note 40 to the financial statements of the Companyfor the year ended 31st March 2017.
B. Diluted EPS on issue of shares pursuant to all the schemes covered under theregulations in accordance with Accounting Standard 20 - Earnings Per Share'issued by
ICAI or any other relevant accounting standards as prescribed from time to time.
Details related to ESOS:
(i) The Company has in existence two ESOS during the year viz. ESOS 2016 and ESOS 2010.The stock options under ESOP 2010 were granted in four tranches and 8079340 options weregranted as tranche 1 of ESOS 2016. The general terms and conditions of the same as givenbelow:
VI. Options granted to Directors & Senior Managerial Personnel :
(vii) A description of the method and significant assumptions used during the year toestimate the fair value of options including the following information:
Statement of Disclosure of Remuneration
(a) Pursuant to Section 197 of the Act and Rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
1. Ratio of the remuneration of each Whole-time Director* to the median remuneration ofthe employees of the Company for the financial year 2016 - 17 the percentage increase inremuneration of Chief Executive officer Chief Financial officer and Company Secretaryduring the financial year 2016-17
* None of the Non executive Directors of the Company was paid remuneration exceptsitting fees paid for Board/Committee Meetings.
i. The percentage increase/decrease in the median remuneration of employees for thefinancial year was -2%.
ii. the Company had 2195 permanent employees on the rolls of Company as on 31st March2017.
iii. Average percentage increase made in the salaries of employees other than the keymanagerial personnel in the last financial year was .-3%.
iv. It is hereby affirmed that the remuneration paid during the year is as per theRemuneration policy of the Company.
(b) pursuant to Section 197 (12) of the Act and Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial personnel) Rules 2014
on behalf of the Board of Directors For Geojit Financial Services Limited