Your Directors have pleasure in presenting their 26th Annual Report ofthe Company for the financial year ended March 31 2020.
|Particulars || |
| ||2019-20 ||2018-19 ||Change (%) ||2019-20 ||2018-19 ||Change (%) |
|Total Revenue ||286.88 ||285.42 ||00.51 ||306.37 ||309.77 ||-1.10 |
|Total Expenditure ||224.58 ||235.00 ||-04.44 ||232.26 ||244.46 ||-4.99 |
|Profit before exceptional items and tax ||62.30 ||50.41 ||23.59 ||74.11 ||65.31 ||13.47 |
|Exceptional Item ||-10.20 ||-7.50 ||-36.00 ||-4.49 ||-7.50 ||-40.13 |
|Total Tax Expenses ||14.36 ||18.37 ||-21.83 ||18.72 ||27.85 ||-32.78 |
|Share of Profit/(loss) in Associate ||- ||- ||- ||-0.32 ||-2.24 ||-85.71 |
|Profit for the year ||37.74 ||24.55 ||53.79 ||50.58 ||27.72 ||82.47 |
|Total Other Comprehensive Income ||-0.09 ||0.15 ||-160.00 ||-0.02 ||0.22 ||- |
|Total Comprehensive Income ||37.65 ||24.69 ||52.49 ||50.56 ||27.94 ||80.96 |
FINANCIAL HIGHLIGHTS OF SUBSIDIARIES
|Company Name ||FY 2019-20 Total income ||FY 2019-20 Total Expense ||FY 2019-20 Profit / (Loss) for the year |
|Indian Subsidiaries || || || |
|Geojit Technologies (P) Ltd. ||25.34 ||10.52 ||10.52 |
|Geojit Credits (P) Ltd ||1.26 ||1.72 ||-0.46 |
|Geojit Investment Services (P) Ltd ||0.85 ||0.33 ||0.47 |
|Geojit Techloan (P) Limited ||0.07 ||0.05 ||0.003 |
|Overseas Subsidiaries Joint Ventures & Associates || || || |
|Barjeel Geojit Financial Services LLC ||7.44 ||6.22 ||1.22 |
|Al-Oula Geojit Capital Company ||0.01 ||1.50 ||-1.49 |
|Qurum Business Group Geojit Securities LLC ||2.15 ||2.36 ||-0.21 |
|BBK Geojit Securities KSC ||0.44 ||0.49 ||-0.05 |
1. Consolidation of Barjeel Aloula and BBK Geojit is on "equitymethod". Therefore the consolidated profit / (loss) is directly adjusted to thecarrying amount of investments in the books. (ie. The total income and total expense donotdirectly get consolidated. Only the share of GFSL in total gain / (loss) is consolidatedinto P&L.)
REVIEW OF PERFORMANCE
On a standalone basis your Company has recorded a total income of Rs.286.88 crores for the financial year ended 31st March 2020. The profit before tax is Rs.62.30 crores and the net profit after tax is Rs. 37.74 crores. Basic earnings per sharework out to Rs. 1.58 compared to Rs. 1.03 in the previous year.
On a consolidated basis your company earned a total income of Rs.306.37 crores for the financial year profit before tax of Rs. 74.11 crores and a netprofit of Rs. 50.58 crores.
A detailed analysis of the performance is given in the ManagementDiscussion and Analysis Report appended hereto.
The Board at their meeting held on 11th March 2020 declared an interimdividend of Rs. 1.50/- per equity share for the financial year 2019-20.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared inaccordance with Section 129 of the Companies Act 2013 read with relevant AccountingStandards issued by the Institute of Chartered Accountants of India and forms part of thisAnnual Report.
STATE OF COMPANY'S AFFAIRS AND OPERATIONS
The proactive and continuous efforts by the Company in terms ofdiversifying and de-risking business primarily into product distribution are helping tobuild a stable revenue franchise. Mutual fund and insurance distribution has opened a newsource of revenue with the latter also providing protection against market volatilityrelated shocks.
The Company has strengthened its digital focus as COVID-19 pandemicpose challenge of social distancing and reduced movement. Aadhar-based digital onboardinghas been relaunched to enable customers easily onboard and transact from the safety oftheir homes. Mutual Fund reconciliation platform was automated. Further to strengthenpositioning as an advisory services company portfolio analysis and financial planningapplications were improved with enhanced features.
INCREASE IN SHARE CAPITAL
During the year under review the paid up share capital of the Companyincreased from Rs. 238295401/- divided into 238295401 equity shares of Rs. 1/- each
to Rs. 238299760/- divided into 238299760 equity shares of Rs.1/- each consequent to the issue of 4359 equity shares to employees upon exercise ofstock options under Employee Stock Option Plan-2010 of the Company.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
As on 31st March 2020 following are the subsidiaries/associates/joint ventures of the Company:
i. Geojit Credits Private Limited
ii. Geojit Investment Services Limited
iii. Geojit Technologies Private Limited
iv. Geojit Techloan Private Limited
v. Qurum Business Group Geojit Securities LLC
i. Barjeel Geojit Financial Services L.L.C
ii. Aloula Geojit Capital Company
i. BBK Geojit Securities KSC
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The following appointments were made during the year
Mr. Sanjay M Kaul IAS as Non- Executive Director (nominee ofKerala State Industrial Development Corporation Limited) with effect from July 19 2019
Mr. James Varghese as Independent Director with effect fromNovember 14 2019.
Mr. M G Rajamanickam IAS as Non- Executive Director (nominee ofKerala State Industrial Development Corporation Limited) with effect from December 122019
Mrs. Alice Geevarghese Vaidyan as Independent Director witheffect from August 04 2020
As per the provisions of the Companies Act 2013 Mr. A Balakrishnanretires by rotation at the ensuing Annual General Meeting and being eligible seeksre-appointment. The Board recommends his re-appointment.
III. Retirements and Cessations
Dr. Sharmila Mary Joseph IAS and Mr. Sanjay M Kaul IAS (nominees ofKerala State Industrial Development Corporation Limited) resigned as Non-ExecutiveDirectors of the Company effective July 19 2019 and December 12 2019 respectively.
Mrs. Mohana Raj Nair ceased to be a Non-Executive Independent Directorof the Company w.e.f February 02 2020 due to death.
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEE AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of Companies Act 2013 and the SEBI (ListingObligation & Disclosure Requirements) Regulations 2015 the Board of Directors hascarried out an annual evaluation of its own performance its Committee and individualDirectors. Assessment for evaluation of performance of Board its committees andindividual directors were prepared based on various aspects which among other parametersincluded composition of the Board and its Committees conducting of Board Meetingseffectiveness of its governance practices etc.
Further the Independent Directors at their meetings held during theyear reviewed the performance of the Board the non Independent Directors and theChairman.
CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT
The Board has adopted a Code of Conduct for Directors & SeniorManagement in accordance with the provisions of the Companies Act 2013 and Regulation17(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheCode also incorporates the duties of Independent Directors. All the Board Members andSenior Management Personnel have confirmed compliance with the Code. A declaration to thateffect signed by the Managing Director forms part of the Corporate Governance Report. Acopy of the Code has been put on the Company's website.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Independent Directors of the Company are persons of integritypossessing rich experience and expertise in the field of corporate management financecapital market economic and business information. The company has issued appointmentletter to the Independent Directors setting out in detail the terms of appointmentduties roles & responsibilities and expectations of the Independent Director. TheBoard of Directors has complete access to the information within
the Company. Presentations are regularly made to the Board of Directors/ Audit Committee / Nomination & Remuneration Committee / Corporate SocialResponsibility Committee / Stakeholders' Relationship Committee on various relatedmatters where Directors have interactive sessions with the Management.
The details on the Company's familiarization programme for IndependentDirectors can be accessed at http://www.geoiit.com/pdfs/ FAMILIARIZATIONPROGRAMMEFORINDEPENDENTDIRECTORS.pdf.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each IndependentDirector under Section 149(7) of the Companies Act 2013 that he/ she meets the criteriaof Independence laid down in Section 149(6) of the Companies Act 2013 and in terms ofSEBI (Listing Obligation & Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to requirement of Section 134(3)(c) and Section 134(5) of theCompanies Act 2013 and based on the representations received from the Management yourDirectors state that :
i. i n the preparation of the annual accounts for the financial yearended March 31 2020 the applicable accounting standards have been followed and there areno material departures from the same;
ii. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2020and of the profit of the company for the year ended on that date;
iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;
iv. the Directors have prepared the annual accounts on a going concernbasis;
v. the Directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and
vi. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
POLICY RELATING TO DIRECTORS' APPOINTMENT
The Company with the approval of Nomination & RemunerationCommittee has adopted a policy on Board diversity and the recommendation of candidaturefor Board appointment will be based on merit that complements and expands the skillsexperience and expertise of the Board as a whole taking into account gender ageprofessional experience and qualifications cultural and educational background and anyother factors that the Board might consider relevant and applicable from time to timetowards achieving a diverse Board.
MANAGEMENT'S DISCUSSION & ANALYSIS
The Management's Discussion and Analysis is given separately and formspart of this Annual Report.
Your Company has complied with the Corporate Governance requirementsunder Companies Act 2013 and as stipulated under the provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. A detailed Report on CorporateGovernance is given as Annexure I to this Report. A certificate of Statutory Auditorconfirming compliance of the Corporate Governance requirements by the Company is attachedto the Report on Corporate Governance.
EXTRACT OF ANNUAL RETURN
The extract of the Annual return in Form MGT - 9 is given as AnnexureII to this Report.
At the Annual General Meeting held on August 04 2016 M/s. B S R &Associates LLP Chartered Accountants were appointed as statutory auditors of the Companyto hold office till the conclusion of the Twenty Seventh Annual General Meeting to be heldin the year 2021.
The Auditors' Report to the Shareholders for the year under review doesnot contain any qualification.
SECRETARIAL AUDIT REPORT
In accordance with the provisions of Section 204 of the Companies Act2013 the Board has appointed M/s. Satheesh & Remesh - Company Secretaries inWholetime Practice Kochi as the Secretarial Auditor for the financial year 2019-20. Thereport of the Secretarial
Auditor for the FY 2019-20 is annexed to this report as Annexure III.
There are no audit qualifications in the said Secretarial AuditReport.
NUMBER OF BOARD MEETINGS
The Board of Directors met 5 (five) times in the financial year2019-20. The details of the board meetings and the attendance of the Directors areprovided in the Corporate Governance Report.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee is constituted with three NonExecutive IndependentDirectors comprising of Mr. R Bupathy as the Chairman Mr. Radhakrishnan Nair and Mr.Mahesh Vyas as other Committee Members.
The company follows a policy on remuneration of Directors KeyManagerial Personnel (KMP) Senior Management Personnel (SMP) and other employees of theCompany. The policy was approved by the Nomination & Remuneration Committee of theCompany.
The Non-Executive Directors of the Company shall be entitled to receiveremuneration by way of sitting fees for attending meeting of the Board and Committeesthereof.
The remuneration to KMP's and SMP's and employees shall include directremuneration and indirect remuneration primarily and strategic remuneration which can bePerformance Linked and/or Profit linked incentive.
Remuneration Policy of the Company can be accessed at https://www.qeoiit.com/pdfs/Remuneration-Policv.pdf.
RISK MANAGEMENT POLICY
Risks are an integral part of business and it is imperative to managethese risks at acceptable levels in order to achieve business obiectives. The risks towhich the Company is exposed are both external and internal. Your company has formulated aRisk Management Policy to provide an integrated and standardized approach in managing allaspects of risk to which your Company is exposed. An Internal Risk Management Committeemonitors the Enterprise Risk Management Policy with participation from officersresponsible for risk management and to take appropriate steps to ensure that these risksare at acceptable levels.
WHISTLE BLOWER POLICY & VIGIL MECHANISM
Your Company has laid down a Vigil Mechanism and formulated a WhistleBlower Policy in order to provide a framework for responsible and secure whistle blowingmechanism. The Policy aims to provide an avenue for Employees and Directors to raise theirconcerns about unethical behavior actual or suspected fraud or violation of the company'scode of conduct and it also empowers the Audit Committee of the Board of Directors toinvestigate the concerns raised by the employees.
All Directors and Employees of the Company are eligible to makeprotected disclosures under the Policy addressed to the Vigilance Officer of the Companyin relation to matters concerning the Company. We further affirm that no employee of theCompany was denied access to the Audit Committee.
The details on the Company's Whistle Blower Policy and Vigil Mechanismcan be accessed at http://www.geojit. com/pdfs/VIGIL MECHANISM%20 %20Final%20 DraftRevised.pdf
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingactivities to be undertaken by the Company which has been approved by the Board. TheCompany established a charitable trust namely Geojit Foundation and carry most of the CSRactivities of the company through the foundation.
The Company has identified Education and Health as key focus areas ofengagement for CSR activities. The Company would also undertake other initiatives incompliance with the Section 135 read with Schedule VII of the Companies Act 2013. TheAnnual Report on CSR activities is annexed herewith and marked as Annexure IV to thisreport. The CSR Policy of the company is available on website of the company at https://www.geoiit.com/pdfs/CSR Policy 17-5-2018.pdf
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.
The Company has zero tolerance for sexual harassment at work place andhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provision of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed there under.
As required under the Law an internal complaints committee has beenconstituted for reporting and conducting inquiry into the complaints made by the victim onthe harassments at the work place.
Your Directors further state that during the year under review therewas no complaint received pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
INTERNAL CONTROL SYSTEM
The Company has put in place an adequate system of internal controlcommensurate with its size and nature of business. These systems provide a reasonableassurance in respect of providing financial and operational information complying withapplicable statutes safeguarding of assets of the Company and ensuring compliance withcorporate policies.
The scope and authority of the Internal Audit activity are well definedin the Internal Audit Charter approved by the Audit Committee. The Company has adedicated Internal Audit team with skills commensurate with the size nature &complexity of operations of the Company. Internal Audit department reports functionally tothe Audit Committee of the Board which reviews and approves risk based annual internalaudit plan. Audit Committee periodically reviews the performance of internal auditfunction. During the year the Audit Committee met regularly to review reports submittedby the Internal Audit department. All significant audit observations and follow-up actionsthereon were reported to the Audit Committee.
The Company's Board & Audit Committee reviews adherence to internalcontrol systems internal audit reports and legal compliances. The Audit Committee reviewsall quarterly and yearly financial results of the Company and recommends the same to Boardfor its approval.
INSIDER TRADING REGULATIONS
Based on the requirements under SEBI (Prohibition of Insider Trading)Regulations 2015 as amended from time to time the Company has adopted a Code of Conductfor Prevention of Insider Trading and Policy on Disclosure of Material Events/ Informationwhich is applicable to all Directors and the Designated Employees of the Company. The Codelays down the guidelines which advices on the procedures to be followed and disclosuresto be made while dealing in shares of the Company and indicate the consequences ofnon-compliance. A copy of the Code has been put on the Company's website.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company duringthe financial year with the related parties were in the ordinary course of business and onan arm's length basis. During the year the company had not entered into any contract/arrangement/ transaction with any related party which could be considered material inaccordance with the policy of the company on materiality of related party transactions.Disclosure in Form AOC-2 is given as Annexure V.
The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on the Company'swebsite.
Your Directors draw attention of the members to Note 40 to thefinancial statement which sets out related party disclosures.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The Company's head office is an energy efficient building consuming 25percent less energy and over 40 percent less water than conventional buildings of similarsize. The company also ensures optimized and efficient energy management in all itsoffices located across India. With the implementation of its digital initiatives thecompany has also substantially reduced its paper consumption.
The company has always leveraged technological innovations to improveits operational efficiency to satisfy and retain its customer base. Keeping in line withSEBI guidelines the company has been automating the customer on-boarding process. Thishas enabled the Company to reduce time-consuming activities and complexity of physicalon-boarding of clients.
Today almost 60 percent of the Company's client's trade online andover 40 percent buy and sell mutual funds using its online trading platforms and mobileapps. The latest updates on our online platforms and apps give investors a more powerfultrading experience.
The details regarding foreign exchange earnings and outgo are given asAnnexure VI to this Report.
As a service Company the Company's operations are heavily dependent onqualified and competent personnel. As on March 31 2020 the Company had 2031 employees onits rolls. Your Company takes significant effort in training all employees at variouslevels.
PARTICULARS OF EMPLOYEES
Particulars of employees covered by the provisions of Section 197 ofthe Companies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given as Annexure VII to this Report.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company presently has two Employee Stock Option Schemes viz ESOS2016 and ESOS 2017. The Nomination & Remuneration Committee at its meetings heldduring the year granted 159691 options under ESOS 2016 and 90000 options under ESOS2017. The Board of Directors of the Company has allotted 4359 equity shares of '.1/- eachunder ESOS 2010 Scheme to its employees who exercised the stock options on various datesat various exercise prices in accordance with the terms and conditions of ESOS. The ESOS2010 Scheme has expired in June 2019
The aforesaid ESOS schemes are in compliance with SEBI (Share BasedEmployees Benefits Scheme) Regulations 2014 and the details are attached as Annexure VIIIto this report and also available on our website and can be accessed at https://www.geoiit.com/pdfs/ESOSDisclosure.pdf
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF
Pursuant to the provisions of Section 124 of the Companies Act 2013money transferred to the Unpaid Dividend Account of the Company and which has remainedunpaid or unclaimed for a period of seven years from the date of transfer has beentransferred by the Company to the Investor Education and Protection Fund("IEPF") established by the Central Government pursuant to Section 125 of thesaid Act.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 forms part of the notes to the financial statements provided in thisAnnual Report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review.
a. Details relating to deposits covered under Chapter V of theCompanies Act 2013.
b. Issue of equity shares with differential right as to dividendvoting or otherwise.
c. Issue of shares (including sweat equity shares) to employees of thecompany under any scheme save and except ESOS referred to in this report.
d. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operation infuture.
Your Directors wish to acknowledge the valuable guidance and assistancereceived from Securities and Exchange Board of India Stock Exchanges CommodityExchanges Depositories & other Regulatory Authorities BNP Paribas S A Kerala StateIndustrial Development
Corporation Limited our clients and business partners. We look forwardto receiving 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 ||Sd/- |
|Date: 04.08.2020 ||Chairman |